Close to 60% of crypto press releases linked to red flag projects

Most crypto press releases distributed through industry channels are for projects with significant credibility concerns or fraud indicators, according to a study released Tuesday.

Crypto PR firm Chainstory has found that more than 60% of published crypto press releases came from high-risk or confirmed scam ventures. Only about 2% of the reviewed releases had descriptions that would qualify as meaningful news under publication standards. 

A press release is a formal statement sent to newsrooms to help journalists assess if the information shared is newsworthy. Some established services, such as Businesswire and PRNewswire, charge fees to run a PR campaign, but have stricter verification and compliance procedures.

Crypto projects bypass red flag checks by PR firms 

According to Chainstory’s report, cryptocurrency media has enabled direct-to-consumer publication without editorial filtering. Niche crypto outlets are now “guaranteeing placement” for new projects and selling publication spots in networks of partner websites. 

The barriers to publication for new projects have been lowered, compliance oversight is limited, and advertisers can push content live without an independent review. In about 2,893 crypto press releases distributed between June and November of last year, more than half of those came from projects with “classic red flags.”  

Chainstory spotted several statements with warning signs, such as fully undoxxed teams, unrealistic token performance predictions and economics, and websites that are blatantly copy-pasted. The agency also confirmed some projects were outright scams after cross-referencing names from the press releases with blacklisted projects and scam alerts. 

“Today, any crypto project with a few thousand dollars can buy its way onto a multitude of news sites. This practice has created a parallel news pipeline that operates outside the constraints of journalism. Because legitimate media outlets ignore minor product updates, obscure token launches, and overt marketing fluff, the crypto wires have become the primary channel for this content,” the group of researchers wrote in the study.”

Chainstory also noted that a misleading impact does not require that statements be completely false. Information in releases may be selectively framed, exaggerated, or presented without context, while distribution services claim to have performed some compliance checks and verified contact details. 

However, wire service providers admit they cannot rigorously fact-check every claim in the thousands of press releases handled daily. One spokesperson said the responsibility belongs “on the clients” submitting the content, which the study called a “fox guarding the henhouse” scenario.

In September 2021, a fake statement claimed that Walmart would begin accepting Litecoin as payment. The announcement was published through a traditional newswire and picked up by several news outlets, causing Litecoin’s price to go up by about 30% within 20 minutes. 

When Walmart finally denied the claim and the distributor retracted the release, LTC dropped in value by about the same percentage in half the time, Cryptopolitan reported.

“If a fake press release could dupe even Reuters and CNN, it’s easy to imagine how everyday retail crypto investors, who see press releases on aggregator sites or social media, might be misled by the steady stream of paid announcements that look like real news,” the agency explained.

Product and feature promotion top press release trends

Chainstory categorized the 2,893 releases by subject to assess which paid distribution channels most frequently promote. The largest segment, 1,417 releases or 48.98% of the total, focused on product or feature updates like new app functions, minor version changes, and platform changes that would not warrant a standalone news article. 

Trading, listings, and exchanges accounted for 694 releases, or 23.99% of the sample. These mostly announced new coin listings or trading campaigns that, in isolation, would not usually receive major editorial coverage.

Token launches, tokenomics, and presales took up 405 releases, or 14.00% of the total volume. Events, conferences, and sponsorships racked up 174 releases, or 6.01% of the dataset. 

Only 58 of 2,893 releases, about 2%, covered funding and corporate financial events, since this type of information is generally considered “newsworthy.” 

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