The problem with influencers promoting cryptocurrency: Understanding the FaZe clan fiasco

The FaZe clan has been in the spotlight numerous times over the years. From its members competing in various video games at a professional level, to even winning boxing matches in the ring; the clan stands strong, and ever since its inception, it has grown to new heights.

However, recent events have left the internet scandalized, after it was revealed that several members of the FaZe clan were involved in publicizing and promoting a cryptocurrency that was eventually "pumped and dumped," which led to it tanking soon after.

While many names were brought to the forefront and action was taken against the accused FaZe clan members, the real question to be asked is, "should influencers be advocating and promoting cryptocurrency?"

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FaZe clan got fazed: The cryptocurrency shortcomings

Right off the bat, let it be known that advocating for cryptocurrency is not illegal. However, when said crypto tanks and fails, there are bound to be repercussions. While it is partly the company's fault as well for choosing influencers to promote their product, the problem is larger than that.

Unknown to most fans who invest later on, early investors, influencers or advocates of a certain cryptocurrency are given a first mover's advantage by the company and are allowed to invest at dirt cheap rates. Any rise in the value of the currency is an instant profit for them.

Furthermore, ambassadors or those promoting it are paid as well, in terms of an agreement. Suffice to say, whichever way things go post investment, influencers always come out on top of things.

On the flip side, those who invest when the currency is being advertised, depending on a lot of factors, may or may not make a profit, and in the worst case scenario, they may lose the entire amount of money invested.

With all that being said, one thing that has to be acknowledged is that the problem is a two way street. Influencers want to get advertising deals, while fans want to try and make money using "get-rich-fast schemes".

Given their popularity and reach, influencers will attract a lot of people to invest, however, rather than staying for the long haul, most will "pump and dump" for short term profit, which tanks the stock and leads to a massive fallout for everyone involved.

The FaZe clan issue is just one of many such incidents that have taken place, and with the rise of crypto, many more will surely follow in the future. In essence, if an influencer is advocating something that can be bought or invested in, fans should always take it upon themselves to do a bit of research first before buying.