Paul Osadchuk
It remains unseen for many that the crypto industry has been fighting an existential crisis over the last two years. And it surely is winning this fight, armed with the ultimate tool of zeitgeist shaping – PR.
Which challenges are put in the face of crypto, and how does it manage to keep the sailing smooth amidst its financial sovereignty? In this research, we’ll outline the core principles of crypto PR and explain why it stands out among the other industries.
Not surprisingly, the public relations (PR) basics, as well as the strategic goals and frameworks for their achievement differ across the industries. But it would be difficult to agree that this very difference is radical. On the face, the ultimate task of PR of coining and defending the gratifying reputation moves from segment to segment. The only thing that is changing is the challenges.
However pretentious this might sound, but Web3 PR exists quite distantly from the tech industry. At the same time, it might be found similar to political PR. But how do such opposing rivals share something in common?
The main idea of Public Relations – to build a decent brand face – is outbound from the ways to achieve a positive reputation, while political PR-specialists aim to neutralise a negative one. Simply put, political promotion always implies a negative reaction – however favourable a certain novelty can be. And so does crypto PR.
While the lack of trust to political and government actors is a natural tendency in the democratic society, the fierceful responsibility of the crypto community has similar roots.
Apart from socio-political dimension, crypto is the only industry fully relying on the addressed audience; and the audience feeling its ultimate role in the actor – consumer/client vertical of relations.
“Reputation management plays an important role in the success of crypto projects, as a positive image is crucial for garnering trust and attracting users or investors. Without a strong reputation, progressing and achieving milestones becomes exceedingly challenging, as seen in the setbacks experienced by projects like FTX (SBF) and Luna,” – told us Abdulsamad Muhyideen, the Chief Marketing Officer at Coinscreed media resource.
Just like the electorate supports the viability of a politician's career, the crypto community maintains the operability of a certain decentralized project.
The technical basis of blockchain envisages that the increased number of users proportionally equals an enhanced functionality. By putting it simple, every single crypto fan, every transaction, every investment into the decentralized array sustains the operability of the chain.
On the blockchain layer, a user is represented as a node – a device that runs the blockchain protocol’s software, allowing it to help validate transactions to keep the network up and running. The more nodes are involved, the more decentralized the network is.
By far, the diminishing of nodes quantity may bring a core idea of decentralization down, and even cease the existence of a certain network.
This does not override the commercial side. Contrary to other industries, in crypto, users are the main investors. The projects highly bet on public token sellout – Initial Coin Offering (ICO) – to raise funds for the further development. This brings us to the two pillar notions of crypto marketing:
Users are not only valued, but given the responsibility for the project's viability.
Users share prior responsibility, making them more concerned about the project's reputation and credibility.
Crucially, the user involvement brings the reputation of the project to the forefront. The decent face is hard to maintain in the crypto community, but it is not the only fight the industry is trying to win.
Seeing that crypto is entering the global economy, it is also striving to create a reputable image for traditional finance actors and everyday users.
We live in a period, when almost everyone is aware about crypto.
The latest research by Consensus indicates that 92% of respondents have globally heard about cryptocurrencies.
But when it comes to its actual utility, crypto faces a lack of knowledge about it. Among the 92%, only 16% of respondents associate digital currencies with “the future of money”, while only half of the focus group could disclose the “crypto” term more openly.
With the increased crypto adoption rates, this tendency poses another task for crypto actors to open a second vector of reputational management – users that are keen on entering the crypto market.
The essence of crypto PR as we know it now received its distinct shape thanks to FTX collapse.
Previously, a third-largest crypto exchange, and now a first word to come with “crypto scam” has shifted the balances – awaited for some, but feared by others.
“…what FTX did change for a lot of retail investors is their belief that a crypto native new company is maybe less trustworthy or less stable than somebody like, you know, BlackRock or Goldman or somebody with experience in the traditional financial world. Somebody who adheres to regulation, somebody who's been around for many, many years…” – said Olga Khariff, senior Bloomberg reporter, noting the potential inclination towards trustworthy asset managers over crypto exchanges. Seeing that presumption was brought into action in January 2024, reputational challenges for crypto radicalised.
While the consequences of FTX’s demise are steadily upfolding, the ball became rolling short after the disruption. Namely, cryptocurrency exchanges like Crypto.com downsized due to a surge of customer withdrawals, and a majority of crypto lenders filed for bankruptcy. At the same time, regulators have pushed more fiercely for greater government oversight of the cryptocurrency.
Without any exaggeration, it’s the FTX collapse which put the reputational management at the dominating seat. Now, not only should the trust be won, but it must be verified.
This means that apart from delivering the value of the brand in with the constant communications, crypto companies became obliged to be entirely transparent with their customers and stakeholders.
What FTX also changed is crisis management. Long gone are the days of crypto companies neglecting all sorts of FUD or reputational drawbacks. Now when such behaviour is viewed as a sign of uncertainty or untrustworthiness, the quickest and clearest reaction has become a must.
For instance, such reputation management strategy (among the many) has been sharpened by Binance. While being surrounded by the crisis and operational drawbacks, often justified, Binance always manages to cope with the obstacles mostly by swift management. Back in time when Changpeng “CZ” Zhao ran the company, he had a distinctive feature in his public face – reacting to the negatives or FUD personally in the quickest way possible.
This behaviour stresses out another aforementioned core of crypto reputational management – transparency. When personal brand is becoming a trend in PR overall, it is a vital criteria of crypto industry’s communication means.
Simply put, people do not trust a company, but they trust a person. Just like many exchanges, Binance maintains a strong balance, knowing which actor should represent each claim.
As for regulation, crypto brands turned to proving their inclining stance on it, whatever that may be. Due to the inevitability of crypto asset’s legislation, the industry subjects can no longer remain silent on big topics on transparency and security issues.
Notably, this runs counter to the motto of cryptocurrency adepts, which lies in total decentralization and popularising government-detached assets. However, the brands did their best to compel the users about regulations’ necessity, posing security and crypto market thrive as the main pros of them.
In today's disinformation-driven media environment, the cryptocurrency sector is becoming a target for spreading fear, uncertainty, and doubt (FUD). This poses a challenge for cryptocurrency firms as they strive to combat misinformation while upholding trust and credibility with their users. Typically, the spread of FUD narratives is initiated on social media platforms like Twitter or Telegram. Once these narratives gain traction online, they often find their way into media outlets extending beyond the crypto sphere.
The impact of FUD on a companies' reputation can be substantial. False or negative information propagation can trigger panic selling among investors who seek to safeguard their assets. Failure to promptly address and debunk FUD can result in a loss of faith in the cryptocurrency or company.
Binance, one of the most popular cryptocurrency exchanges in the world, is constantly faced with the need to fight negativity. In recent years, the exchange has faced many problems and controversies, including litigation with the SEC, asset laundering, cooperation with malicious organizations, and much more. Binance's involvement in the list of illegal activities that emerged put a big black mark on the exchange's reputation. But the numerous crypto exchanges not only have the highest percentage of assets held in cold wallets, but they also have strict anti-money laundering policies and actively comply with the requirements of the Financial Action Task Force on Money Laundering (FATF), which further emphasizes their reliability.
However, despite all the troubles, Binance is still trying to maintain its brand image. In addition to Binance's marketing, which includes numerous unique case studies depending on the region and the large-scale development of the community, the exchange regularly interacts with its community through various channels such as social media and blog posts. Binance is proactive and tries to respond quickly to concerns and clarify misconceptions. Even under CZ's leadership, it often responded to accusations and rumors and provided clarifications in its X.
“The most formidable challenge in crypto PR's reputation management lies in formulating an effective strategy. Securing the right strategist is essential for maintaining and stabilizing a project's reputation. An exemplary case is observed in how figures like CZ and his platforms like Binance navigated legal challenges, including allegations of insider trading, fraud, terrorism funding, and corruption. Despite substantial legal consequences, the strategic approach ensured the preservation of both the platform and personal reputations,” – Abdulsamad Muhyideen comments.
Blockchain technologies can be complicated at first glance for the average person. And effective PR requires a clear understanding of these concepts in a way that the audience can understand. Education helps PR professionals to understand all the nuances of the technology in order to convey the benefits and potential risks to the audience.
The cryptocurrency market is very sensitive to misinformation and fraud. Therefore, it is necessary to have basic knowledge to distinguish truthful information from speculation. Education has become a key tool in the fight against disinformation and fraud. Companies are constantly launching new projects aimed at raising user awareness. Thanks to the resources and knowledge they provide to users, companies also increase their credibility.
Cryptocurrency exchanges offer different types of courses for all cryptocurrency enthusiasts of different levels. Moreover, their impact on the education of crypto enthusiasts is not limited to educational projects. Exchanges also support education and innovation in the field of blockchain and digital assets through cooperation with universities and colleges.
For example, Kraken has partnered with the University of Wyoming, WhiteBIT has signed a Memorandum of Understanding with the National University of Kyiv-Mohyla Academy, and Coinbase has collaborated with several universities to promote education and research in cryptocurrencies and blockchain technology.
Crypto PR faces ongoing challenges in managing reputation in an environment of constant innovation, regulatory uncertainty, and media scrutiny. By prioritizing openness, public engagement and community education, companies build trust, mitigate the impact of negative events and create a positive image of the industry. As the crypto industry continues to evolve, effective PR strategies play an important role in shaping perceptions that ultimately contribute to the long-term success and sustainability of the industry.
