Press Release: Crypto Publishers Need To Self-Regulate, Too
This is not a paid press release; you can hold me accountable for what is written on this page.
San Francisco, California: A cryptocurrency investor wakes up to news that one of the projects he had contributed to with Ethereum has gone belly-up. Actually, it was never “up” to begin with; the claims that the investor read in press releases just turned out to be completely false.
This scenario has been played out dozens of times by now in the still-nascent ICO and crypto industry. Most recently, Centra was shut down by the SEC, taking the coin’s $300 million market cap down with it, and leaving hundreds of investors with significant losses. What’s interesting is the role the crypto industry media niche has played in this story, mostly in the form of paid press releases that seem to come with very little screening or accountability.
Bitcoin.com, a wallet service and crypto publisher, called Centra a “cautionary tale” in their article on the closure. However, the article makes no mention of the paid press release that Centra bought on Bitcoin.com last July, which said:
The Centra Debit Card enables users to make purchases using their blockchain currency of choice right through the Centra Wallet App. The Centra Card works anywhere that accepts Visa or MasterCard. (archive)
The main charge that the SEC made when shutting down Centra was that they misled investors by making false claims about their relationships with MasterCard and Visa; the false claims being that those relationships existed.
Bitcoin.com claims no responsibility for broadcasting these false claims; they include a disclosure on all paid press releases. Other crypto publishers use similar disclosures when publishing paid press releases, and there are other examples of allegedly fraudulent ICOs using such a service to promote their scheme.
Crypto publishers aren’t the first to run paid press releases from illegitimate companies, nor the first to promote scam ICOs. Cision’s PR Newswire service ran this press release for AriseBank, the “$600 million ICO” that never was.
What sets apart a press release on a crypto publisher’s site is the brand association with a (presumably) knowledgeable industry publication. That’s why these paid press releases are sought after by ICO marketers.
The reason I know press releases work for ICOs is because I also work for a crypto publisher, Blockchain News (a site which Token Report operates). I handle the advertising inquiry inbox, which receives daily requests from ICOs looking to have their content published. Paid press releases are the most popular request, there, including some that specifically require omission of any paid-content disclosure. For now, Blockchain News does not run paid press releases, but rather free-of-cost press releases that are selected by the editors, and align with our editorial guidelines and mission.
Of course, A paid press release lives beyond the site where it is published. It is a guarantee of a published “article” that can be distributed in the same channels as any article published on a mainstream site — like Outbrain and Taboola. Some mainstream publishers like Wired run these native advertising networks on their site.
So, if an illegitimate scam ICO has purchased a paid press release on a crypto publisher’s site, they can have their article appear on Wired.com for as low as $0.50 per 1,000 impressions, and can send users to a press release on a crypto publisher’s site, which they are more likely to trust then the ICO’s site. Paid press releases are useful as content for fake Twitter profiles or Bitcoin Talk accounts to share, as well.
Since Google, Facebook, Twitter, Snapchat, and Reddit have banned ICOs and cryptocurrencies from using their advertising services, the options for paid advertising of such companies have become more limited. Paid press releases and native content platforms are pretty much the last remaining options for affordable, mass-market channels — and may be more effective than Google and Facebook, anyway.
Those two channels could also become cut off, though. Google could decide to de-list crypto-related publishers from Google News, if the integrity of their reporting is called into question by these paid press releases. Outbrain and Taboola could make the same rule changes as Facebook and Google did.
Crypto publishers running paid press releases for ICOs making demonstrably untrue claims (or recklessly exaggerated) are not only doing harm to the investors who are ripped off by these schemes, they are risking further harm to the entire industry by way of getting the industry blacklisted from broader media channels.
I’ll end with this example: Bitcoin.com on April 2 published a press release for “Dietbitcoin.” Here’s what the release has to say about its founder:
Roberto Escobar, alongside his brother Pablo, belong to one of the most successful businessmen in history, having made over $100 billion dollars in profit during his career. “I made over $100 Billion Dollars in profit throughout my career. That’s more than any other company in the world has made in profit, ever.”
If crypto publishers are willing to promote mass murderers and drug traffickers as “successful businessmen,” then how will the rest of the media industry treat our niche?