Placeholder when loading item promotions
One particular pet-themed cryptocurrency that doesn’t require any additional promotion from me says it’s re-marketing its digital goods on London’s public transport system. Only this time, its ads bear the pawprints of regulators. Having banned an initial campaign to give mega-profits to investors, it is now touted as a source of “ecosystems” and “crypto education”.
The fine print reminds passengers that crypto is unregulated and can go down as well as up — not exactly Mad Men stuff. But it is symbolic of a hype-driven sector chastised by the first snowflakes of a crypto winter , with a boom in pandemic speculation giving way to falling prices, job cuts and government crackdowns.
In the faster-paced world of social media, however, things are a little different. “Crypto-Twitter,” which Elon Musk is said to be responsible for, shows no such reluctance — and has long been a magnet for hype, shady research tips, and very real scams, among other platforms. According to the Federal Trade Commission, more than 95,000 people reported losses totaling $770 million in 2021 from scams initiated on social media.
Musk himself has promised to drain the network’s swamp of fraud, spam, and bots — a worthwhile goal, but a contradictory one considering they thrive in the same frictionless communications swarm that makes Twitter Inc.’s money. Musk also seems to want to tie the Twitter wagon closer to the crypto train, tweeting ideas like revamping its subscription service for non-fungible tokens and accepting Dogecoin payments. Most crypto ads are officially restricted on Twitter and require prior approval, although promoters have found other ways to spread the word.
With the winds of regulatory change blowing stronger these days, this could be an ideal time for Musk to deliver on his promised cleanup. He likes to present himself as a free speech advocate and may plan to emulate the success of Asian social media in generating profits from digital tokens. But if fraud continues to escalate, chances are consumer advocates will be knocking on online doors.
Some of this is already happening. The UK government recently pledged to hold the leading social media platforms accountable for tackling fraudulent ads on their services, and will also crack down on ads containing so-called cryptojacking malware that mines crypto without permission.
And the European Central Bank’s Fabio Panetta, who advocated a sweeping tightening of crypto regulation in a scathing speech this week, slammed social media for exacerbating fears of missing out among newcomers to the trading game while also slamming the would underestimate the risks involved. For this reason, more than half of the under-40s have an incentive to make a risky investment, according to the British Financial Supervisory Authority.
Without change, Twitter risks becoming synonymous with more than free speech. It has become part of a crypto market that relies on word of mouth to keep attracting new users to justify inflated prices. When Sam Bankman-Fried, CEO of crypto exchange FTX, recently described an imaginary yield-farming crypto project as gaining value through financial engineering “magic” and word of mouth, he cited the gang hanging around the Twitter water cooler , as a key participant in increasing virtual values.
Twitter has taken on the role that shoeshine tip used to play. This can come back to haunt it. Co-founder and bitcoiner Jack Dorsey tweeted about looming “hyperinflation” in October. Inflation rates have since risen, but Bitcoin has been a terrible hedge, falling more than 40%.
Certainly, Musk isn’t likely to suddenly turn his back on the speculative megaphone that’s been calling out to crypto trolls, evangelists, and newbies alike. If he’s so often impersonated by scammers, it’s because he’s a troll himself. He used Twitter to announce both Tesla’s plan to accept payments in Bitcoin and the eventual reversal of the policy. His attempts at Dogecoin unleashed its memestock and memecoin potential.
But if Twitter wants to monetize its network through ways other than advertising, making it a less dangerous place for people’s wallets would be a start. Crypto pet-themed advertising should be tamed everywhere – both online and on London buses.
More from the Bloomberg Opinion:
• Matt Levine’s Money Stuff: Elon Musk got his deal for Twitter
• Elon Musk’s Tesla master plan doesn’t fit Twitter: Liam Denning
• Elon Musk is the wrong leader for Twitter’s vital role: Timothy O’Brien
This column does not necessarily represent the opinion of the editors or of Bloomberg LP and its owners.
Lionel Laurent is a columnist for Bloomberg Opinion covering the European Union and France. He previously worked at Reuters and Forbes.
For more stories like this, visit bloomberg.com/opinion
Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers
Comments are closed.