Rotunda and a team of regulators recently filed enforcement actions against two casinos in the metaverse, the new digital frontier where users can attend virtual concerts, purchase digital assets or even gamble at a casino.
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Joe Rotunda, the director of the enforcement division of the Texas State Securities Board, said he's seen paid promotions that are not only undisclosed but are pushing fraudulent ventures. According to Armstrong, many of the companies that contacted him while he was collecting fees for endorsements didn't want him to tell his viewers the content was sponsored.Īrmstrong said that five years ago many influencers would not disclose that they were paid to plug projects, but most influencers today are upfront about promotions with their viewers.īut state regulators warn that there are still influencers who lack transparency. Unlike Armstrong, who says he disclosed all of his paid promotional videos, some influencers don't share that they're getting handsomely paid to plug projects. After other cryptocurrency ventures like Ethereum Yield, Cypherium and MYX Network dropped in value, he deleted the promotional videos for them off his channel.ĬNBC reached out to these influencers on the list to verify their fees: Some said the prices were inflated, and those willing to share their pricing said they made a minimum of $1,000 for each promotional video. While Armstrong does disclose that he is not a trained financial professional, many of the ventures he's promoted have plummeted. However, he says that is the only project in which he intervened in that way after investors lost money taking his advice. Some of these influencers were paid as much as $65,000 for a single promotional video, according to that list.Īrmstrong says he used the money he made from the promotion of DistX to refund his followers after the coin crashed, adding that he felt particularly guilty for how heavily advertised it was on his channel. This spring, an anonymous blockchain sleuth posted a list on Twitter naming 44 YouTube crypto personalities and their prices for paid promotions. CNBC found that some of these online personalities get paid thousands to endorse dubious projects. While Armstrong says he stopped accepting paid promotions in January, other influencers still swarm this lucrative market. "I hate it when we talk about stuff that didn't do well."
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While he was accepting paid promotions, Armstrong said he previously made more than $30,000 for a single endorsement, which included his promotional video for DistX, and could easily make more than $100,000 per month in promotions alone.Īrmstrong now says he feels responsible for the losses suffered by his followers. "I mean, of course, I do," he said.