Financial influencers who promote FTX say ‘sorry’ to fans and promise to do better – and that shows the risk of giving investment advice to your followers

Sam Bankman-Fried FTX founder of crypto exchange
Sam Bankman-Fried.

  • Crypto-exchange platform FTX has filed for Chapter 11 bankruptcy.
  • The crypto firm works with many top personal finance influencers.
  • YouTube star Graham Stephan apologized to fans on Thursday: ‘I was wrong and I’m sorry.’

The financial influence that promoted FTX is doing some soul-searching after its implosion.

The crypto-exchange platform invests millions of dollars in partnerships with celebrities such as Tom Brady and top influencers.

Platform, which filed for bankruptcy on Friday, is in crisis. Sam Bankman-Fried stepped down as CEO on Friday and FTX USA is outraged by his withdrawal.

FTX has several high-profile deals with celebrities, athletes, and influencers, including a 19-year sponsorship of the Miami Heat for $135 million. In reaction to the news, some influencers who promoted the company through paid deals and affiliate marketing are apologizing to their fans.

Among the celebrities and influencers paid by FTX to talk about the platform is personal finance YouTuber Graham Stephan, who published a video on Thursday titled, “Let’s talk about FTX.”

“As much as I believed the information I was given, I was wrong and I apologize,” Stephan told his 4.1 million subscribers. “I trusted them, but in the end their parent company was not forthcoming with all the risks. This is one of them. This type of behavior is not something I would ever expect.”

Stephan is one of YouTube’s deadliest creators who has built a lucrative business making videos on financial topics like budgeting and investing. He regularly promotes FTX US on his YouTube channel, encouraging fans to use the platform.

“I canceled with FTX US, before our agreement ended,” Stephan told Insider in an email. “The situation is very disappointing for everyone. I take a step back to reevaluate how I can improve moving forward, because my audience deserves that.”

Stephan has built a loyal fanbase on YouTube by sharing financial advice. He has several videos on investing and saving money with millions of views. The parasocial relationship between influencers and their fans can become complicated when the audience looks to the creator for specific advice.

“I was waiting for this video,” one viewer said in his apology. “After how hard you pushed FTX in the video and podcast. But if it’s going to be transparent, I think everyone wants to know what to get out of a partnership like this or a similar platform.”

Like Stephan, other creators, including Max Maher (905,000 subscribers), Coin Bureau (2 million subscribers), Tom Nash (285,000 subscribers), and Minority Mindset (1 million subscribers), released videos this week addressing the situation and their relationship with FTX. WE.

“I deeply regret all past affiliations with the US FTX company,” Maher said in a November 11 video titled “FTX: The Truth.”

“It’s ridiculous that as individuals we have to question the biggest company in the world. But we just do,” he added. “My whole platform is built on trust and thoroughness of research in everything that I do. You can bet from here on out I will be even more diligent when vetting anyone that I mention in my video.”

Some influencers felt the sector was risky even before FTX’s troubles. Three personal finance influencers told Insider that they continue to stay away from promoting crypto-exchange platforms.

“While I own a small amount myself as a purely speculative investment ‘gambling’, I do not advise my audience to invest in something like that until they have a firm financial footing and can afford to potentially lose that money,”Sarah Wilson, who runs the YouTube channel Budget Girl, wrote to Insider. “It’s hard to convey in advertising, and it’s generally a dealbreaker for sponsors.”

The second personal finance influencer with 1 million customers, who spoke to Insider on condition of anonymity to protect their relationship with the brand, said they refused to work with FTX US and other crypto exchange platforms because of the unregulated market. .

Chris Norlund, who runs a YouTube channel with 21,000 subscribers, has several videos criticizing creators in the personal finance community for experimenting with crypto and NFTs. He told Insider that YouTubers need to remember how young and capable their audience is.

“Think of the people you hurt,” he said. “You want to play for the long game, and you want to build relationships with people forever.”

FTX, Maher, Coin Bureau, Nash, and Minority Mindset did not respond to Insider’s requests for comment.

Read the original article on Business Insider

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