The fallout from the collapse of failed crypto exchange FTX is forcing Web3 brands, and projects previously focused on managing the public’s perception, to concentrate on fighting for their very legitimacy, Laura K. Inamedinova, a Web3 marketing expert, has said. Besides just trying to convince backers and investors, Inamedinova said Web3 players have the more formidable task of convincing regulators.
Security and Reliability Issues Resurface
After initially starting the year focused on community management and the public’s perception, the fallout from FTX’s collapse caused many Web3 brands and projects to switch to arguing for their legitimacy and reputation, Web3 marketing agency founder Laura K. Inamedinova has said. She added that even in cases where there is no direct connection with FTX, Web3 entrepreneurs now feel compelled to address concerns about the security and reliability of their projects.
In addition to their attempts to assuage the fears of nervous investors and backers, Inamedinova, the Founder & CEO of LKI Consulting, said Web3 players have an even more formidable task of convincing regulators. She added that this also applies to projects backed by traditional brands.
“Even for perfectly legitimate businesses and projects, this has been a huge blow to their reputation. Following the FTX fallout, we can expect a new round of global regulations and more attention to security and projects’ credibility than ever before,” Inamedinova said.
For large corporations like Starbucks or Nike, which only recently kickstarted their metaverse projects, the collapse of FTX has rekindled trust issues that took years to overcome. According to Inamedinova, events in the past few months mean it will likely require more time and resources “to prove to mass audiences that blockchain can be trusted.”
The Disastrous Handling of FTX’s Collapse
Meanwhile, when asked about Sam Bankman-Fried (SBF) and others’ roles in handling the crisis from a public relations perspective, Inamedinova told Bitcoin.com News that the whole episode has been a disaster, noting:
From the initial crash to his series of badly phrased tweets to everything after, it was a disaster from beginning to end.
Concerning SBF’s trial and the court outcome’s likely long-term impact on the crypto and blockchain industry, the PR expert suggested that a lot will likely “depend on how the actual prosecution is going to play out and appear in the media.” She said if the process is carried out properly the “verdict will be fair.” However, there is a possibility that the process “will be dragged out.”
To traditional brands trying to navigate away from the crisis, Inamedinova said they should implement “maximum transparency in their Web3 projects.” Doing this is especially important now when the lack of oversight and regulation can result in losses that run into billions of dollars, Inamedinova added.
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Terence Zimwara is a Zimbabwe award-winning journalist, author and writer. He has written extensively about the economic troubles of some African countries as well as how digital currencies can provide Africans with an escape route.
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