There’s nothing wrong with a little positive publicity, unless that publicity is fake. A report by Reuters points out that companies have the ability to buy cryptocurrency reviews in order to promote their products. Even John McAfee has offered to promote a project for a price. This seriously undermines the integrity of the entire cryptocurrency industry and is probably why so many initial coin offerings (ICOs) have failed this year.
According to the report, “Self-proclaimed social media personalities charge thousands of dollars for video reviews. Research houses accept payments in the cryptocurrencies they are analyzing. Rating ‘experts’ will grade anything positively, for a price.”
The media outlet indicated that the practice is widespread and “common.” It pointed out how a Ukrainian startup, Hacken, was looking to promote its coin in 2017, ultimately turning to almost 200 cryptocurrency “social media personalities” to help them. Hacken gave $7,500 to Christopher Greene, host of Alternative Media Television on YouTube, to review its coin. At one point in his promotional video, he called Hacken a “huge market opportunity” with “potential 1,000x returns.”
Four days after the video was published, the price of Hacken’s coin had increased by 14%, according to a tweet posted by Greene. It also produced more than a few buyers. One, a yoga instructor in Canada, responded to the tweet, saying, “That Hacken video was great man! Made me buy a couple hundred.”
Now, however, the price is not so right. It has fallen over 75% and now sits at $0.36. Hacken’s CEO, Dmytro Budorin, has admitted that the practice of paying for reviews is unethical. He added that the reviews “should be either done with (a) sponsored tag or only for projects that (the) reviewer personally supports.”
The example is a good reason why ICOs are so sketchy. On the surface, they may appear to be legitimate and may even have a lot of positive public opinion. However, there’s no way to know if those opinions are real or purchased. There’s a good chance that any reviews found are not accurate assessments of the projects. Given that more than 75% of the ICOs have failed in the past year, it would be wise to consider alternative investment vehicles and avoid the questionable practice completely.
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