Ben Armstrong says his crisis of conscience came in January of this year, when he realized he had to stop a business practice he — and a lot of other people in his line of work — had been engaged in for years.
Armstrong is one of the most-watched crypto influencers on YouTube. His channel, BitBoy Crypto, has amassed more than 1.5 million subscribers. For years, Armstrong said he accepted payments from crypto companies to tout their new products for his vast audience of subscribers. That’s a practice he says he now regrets because it led to some painful losses for his own viewers.
In the fall of 2020, Armstrong announced his partnership with a cryptocurrency called DistX, calling it his most trusted coin. He said the whole idea of DistX was to stop scams in crypto — but Armstrong said in the end, the project itself ended up being a scam. The project team rug pulled, meaning they worked to increase the market cap then disappeared — leaving investors holding the bag. The coin is now down 99%, valued at less than a penny.
Crypto influencer Ben Armstrong in his studio recording a live episode of BitBoy Crypto.
CNBC
While he was accepting paid promotions, Armstrong said he previously made more than $30,000 for a single endorsement, which included his promotional video for DistX, and could easily make more than $100,000 per month in promotions alone.
Armstrong now says he feels responsible for the losses suffered by his followers. “I mean, of course, I do,” he said. “I hate it when we talk about stuff that didn’t do well.”
While Armstrong says he stopped accepting paid promotions in January, other influencers still swarm this lucrative market. CNBC found that some of these online personalities get paid thousands to endorse dubious projects. This spring, an anonymous blockchain sleuth posted a list on Twitter naming 44 YouTube crypto personalities and their prices for paid promotions. Some of these influencers were paid as much as $65,000 for a single promotional video, according to that list.
Armstrong says he used the money he made from the promotion of DistX to refund his followers after the coin crashed, adding that he felt particularly guilty for how heavily advertised it was on his channel. However, he says that is the only project in which he intervened in that way after investors lost money taking his advice.
While Armstrong does disclose that he is not a trained financial professional, many of the ventures he’s promoted have plummeted. After other cryptocurrency ventures like Ethereum Yield, Cypherium and MYX Network dropped in value, he deleted the promotional videos for them off his channel.
CNBC reached out to these influencers on the list to verify their fees: Some said the prices were inflated, and those willing to share their pricing said they made a minimum of $1,000 for each promotional video.
Unlike Armstrong, who says he disclosed all of his paid promotional videos, some influencers don’t share that they’re getting handsomely paid to plug projects. According to Armstrong, many of the companies that contacted him while he was collecting fees for endorsements didn’t want him to tell his viewers the content was sponsored.
Armstrong said that five years ago many influencers would not disclose that they were paid to plug projects, but most influencers today are upfront about promotions with their viewers.
But state regulators warn that there are still influencers who lack transparency. Joe Rotunda, the director of the …….