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Can the FTX Crash Bring Further Regulations for Crypto Marketers?



In recent weeks, we have witnessed in amazement the fall of another crypto industry giant, which reminded us that LUNA wasn’t enough: FTX collapse. 

Definitely, that was a harsh reminder for everyone into crypto. Some people consider the FTX collapse another “Lehman Brothers moment,” and they’re entitled to think so. 

How can the second-largest crypto exchange, with a $32 billion valuation, fall? And it happened in a matter of days.

Will be consequences for the fact that celebs like Tom Brady, Larry David, or Naomi Osaka promoted a fraudulent crypto company?

The FTX saga will bring further regulations for Crypto Marketers? Let’s take it gradually.

FTX was regulated (in theory)

Although it may seem painful to believe, given the actual context of the bankruptcy of FTX, theoretically, FTX was regulated. Moreover, it was even considered the “most regulated” exchange.

FTX had licenses and was regulated by many habilitated institutions in countries like the Bahamas, Gibraltar, Cyprus, the U.S., and many more.

However, if these licenses and regulations existed, why have U.S. regulators been slow to take action to oversee FTX?

Even if some regulations related to the crypto industry exist in some countries, there are a few loopholes that certain companies can slip through. For example, FTX had its headquarters in the Bahamas, so the U.S. regulators could not oversee it because their power was nullified outside the U.S. territory.

Besides, according to Reuters, Bankman-Fried aquired a 10% stake in IEX, with an option to buy it entirely in the next two and half years. This partnership allowed SBF to lobby IEX’s regulator, the Exchange Commission, and the U.S. Securities, on crypto regulation.

On the side, SBF was one of the most prominent donors in U.S. politics, offering more than $70 million to election campaigns in the last 18 months.

FTX was quite the active advertiser

Throughout its short history, FTX has relied heavily on deals, acquisitions, and especially partnerships. The exchange was founded in 2019, so this marketing strategy was based on the fact that most of FTX’s competitors had much more since they were in the market, so they had to catch up.

FTX became one of the most significant crypto exchanges in the U.S. due partly to high-profile marketing deals. Some of these high-profile marketing deals were buying the naming rights for $210 million to esports team TSM, putting its name on the NBA’s Miami Heat arena (FTX Arena), the right to be the official cryptocurrency exchange of the Major League Baseball, and many others.

Besides these, FTX worked directly with some of the most prominent athletes or artists. Some FTX global ambassadors are the NBA star Steph Curry, the football legend Tom Brady, MLB superstar Shohei Ohtani, professional tennis player Naomi Osaka, and the comedian Larry David.

FTX’s SBF was well liked by many finance influencers

In addition to acquisitions and partnerships with athletes or artists, the FTX has also turned to finance influencers. 

Graham Stephan, Max Maher, Coin Bureau, and Andrei Jikh all promoted FTX, and now their audience has lost vast amounts of money investing in crypto. And these finance influencers are just some of the ones.

Some of them have already released apologies videos, but is enough?

Certainly not. There are a lot of people who lose their entire economies or maybe worse. This should raise another red flag about how finance influencers choose their sponsors. However, we must understand that no one could have predicted that FTX could cave in the way it had.

FTX’s crash will likely bring new crypto ads crackdowns

Since the FTX collapse, some countries have already had arguments for regulating the crypto market, but let’s be honest, more is needed.

The possible consequences of how crypto projects can promote themselves are pretty straightforward, given that we already have some crypto ads crackdowns, like Spain. In 2022, Spain imposed new rules for crypto companies, marketing companies hired by said firms, and influencers. So, the fact that FTX, which was in theory regularised, was promoted without problems will bring consequences.

A project with a market capitalization comparable to many wholesome projects, to get to the stage where it was discovered to be a fraud of colossal proportions, no, it can’t get away without repercussions. Of course, the crypto market has already felt the first repercussions, with huge price drops due to the FTX case. 

However, let’s look at it from a positive perspective. Regulations are a remarkable fact happening to crypto if you look at it from a big-picture viewpoint.   

All these new guidelines and legislative attention will help the crypto industry eliminate bad actors and do research for new opportunities. 

Specific projects, such as the Coinzilla Advertising Network, through their legal department, closely monitor how these guidelines and actions are developed to ensure safe advertising. Furthermore, their account managers’ can already support you in promoting your cryptocurrency project.