The fallout from the collapse of the failed crypto exchange FTX is forcing Web3 brands and projects that previously focused on managing public perception to focus on fighting for their legitimacy, said Laura K. Inamedinova, a Web3 marketing expert. In addition to trying to convince sponsors and investors, Inamedinova said Web3 players have the most formidable task of convincing regulators.

Security and reliability issues resurface

After starting the year initially focused on community management and public perception, the fallout from the FTX collapse caused many Web3 brands and projects to turn to defending their legitimacy and reputation, said the founder of the marketing agency Web3, Laura K. Inamedinova. She added that even in cases where there is no direct connection to FTX, Web3 entrepreneurs now feel compelled to address concerns about the security and reliability of their projects.

In addition to his attempts to assuage the fears of nervous investors and backers, Inamedinova, the founder and chief executive of LKI Consulting, said Web3 players have an even more formidable task of convincing regulators. He added that this also applies to projects backed by traditional brands.

“Even for perfectly legitimate businesses and projects, this has been a serious blow to their reputation. After the fallout from FTX, we can expect a new round of global regulations and more attention than ever to the security and credibility of projects,” Inamedinova said.

For big corporations like Starbucks or Nike, which have only recently kicked off their metaverse projects, the FTX collapse has reignited trust issues that took years to overcome. According to Inamedinova, the events of the past few months mean that more time and resources will likely be required “to prove to mass audiences that blockchain can be trusted.”

The disastrous handling of the FTX collapse

Meanwhile, when asked about the roles of Sam Bankman-Fried (SBF) and others in handling the crisis from a public relations perspective, Inamedinova told Bitcoin.com News that the entire episode has been a disaster, pointing out:

From the initial accident to his series of poorly phrased tweets and everything that followed, it was a disaster from start to finish.

Regarding the SBF trial and the likely long-term impact of the court result on the cryptocurrency and blockchain industry, the public relations expert suggested that a lot will likely “depend on how the actual prosecution will play out and appear in public.” the media”. He said that if the process is carried out correctly, the “verdict will be fair.” However, there is a possibility that the process “will drag on”.

Inamedinova told traditional brands trying to get out of the crisis that they should implement “maximum transparency in their Web3 projects”. Doing this is especially important now that a lack of oversight and regulation can result in losses running into billions of dollars, Inamedinova added.

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Terence Zimwara

Terence Zimwara is an award-winning journalist, author and writer in Zimbabwe. He has written extensively about the economic problems of some African countries and how digital currencies can provide an escape route for Africans.