Social media accounts have begun incorporating NFTs into their content strategy in hopes of capitalizing off of a very lucrative subject matter. The NFT space, along with most new industries that experience fast-paced growth, is sure to encounter some controversy, like the recent @NFT account suspension on both Instagram and Twitter platforms.
@NFT in hot water
The @NFT Instagram page frequently posted content encouraging its followers to check out various NFT projects—many of which were profile picture (PFP) collections which is currently one of the most popular types of projects.
This past Wednesday, the popular @NFT Instagram account—which boasted 1.7 million followers and a blue verification checkmark—was in the crosshairs of a viral Twitter thread. The thread accused the @NFT account of repeatedly posting sponsored content and advertising new NFT collections without disclosing the fact that the posts in question were ads.
Twitter user @topshotfund revealed in a thread of tweets that @NFT “is promoting a shadowy cabal of scammy copypasta NFT projects without proper disclosures, thus taking serious advantage of the less informed.”
@topshotfund explained that he’d investigated some new NFT projects that friends had told him about. He discovered that the @NFT account on Instagram had promoted many lesser-known NFT projects. Further, it monetized the promotion of these projects without disclosing that they were in fact advertisements.
The issue is that, according to the FTC’s social media influencer guidance, ads on social media must be disclosed in simple language such as with tags like #ad or #sponsored.
@topshopfund went on to state that a number of shady NFT projects looking for legitimacy would buy phony followers, pay influencers, and pass it off as natural and organic interest. He shared a Twitter screenshot of a spreadsheet that tracked the ROI for 36 NFT initiatives promoted by @NFT. In most cases, the floor price of the NFT was much lower than the mint price, or the original price of the token, meaning that the investors have suffered heavy losses.
The suspension of @NFT
In a Twitter Spaces on Wednesday night, Aaron Avruskin, who co-founded Leverage Game Media—which is backed by Mark Cuban and owns the @NFT account along with several other social media accounts in the sports space—vowed to “immediately cease all ads” on the account, along with a nebulous pledge to “try to be better” going forward.
The next day, Instagram banned the @NFT account. A spokesperson for Instagram’s parent company Meta stated, “This account was disabled following repeated violations of our policies, and it won’t be reinstated.”
Mark Cuban’s role
As for Cuban’s part, the Dallas Mavericks owner and “Shark Tank” investor predictably attempted to distance himself from the situation, stating via email, “I’m an investor, I don’t operate the company” and directed inquiries to Leverage Game Media for further comment.
Cuban added that he is not a co-founder despite the Leverage Game Media site actually having him listed as a co-founder. The site was later updated to remove Cuban from the list of its founders.
Little way forward
Following the suspension, Avruskin stated, “We apologize for any misunderstandings, and we will add additional layers of transparency in what we present to our community moving forward.” We don’t think the people who purchased NFTs from their list of promoted projects will be very forgiving.
