Study reveals that more than 60% of cryptocurrency press releases are associated with high-risk or fraudulent initiatives.

Crypto press release services frequently offer deceptive marketing materials, creating a façade of credibility by juxtaposing unverified announcements with authentic news.

(Bank Phrom/Unsplash/Modified by CoinDesk)

What to know:

• Over 60% of crypto press releases originate from high-risk or fraudulent projects, with a mere 2% conveying significant news, as highlighted by a study from Chainstory.
• According to the study, crypto press release syndication services frequently disseminate misleading marketing messages, crafting a façade of legitimacy by placing unverified announcements next to authentic news.
• This practice enables dubious projects to evade examination, enhancing search visibility while potentially deceiving readers.

Crypto press release distribution services have emerged as a means for dubious projects to evade third-party oversight and fabricate a sense of legitimacy, a recent Chainstory report reveals.

The researchers analyzed 2,893 releases distributed from June to November of the previous year. They discovered that over 60% stemmed from projects displaying “classic red flags” such as anonymous teams making implausible claims, generic websites, and aggressive strategies to pressure investors. Some were outright scams confirmed as fraudulent by cross-referencing blacklists and active scam alerts.

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In contrast to established traditional distribution services, press wires focused on crypto often have agreements that ensure placement on numerous websites with minimal oversight. These paid placements frequently appear alongside genuine news, sometimes lacking clear labels, making it challenging for readers to distinguish between them.

“If you encounter a crypto press release on a news site, the likelihood is greater than 50/50 that the project behind it lacks credibility (or worse),” the researchers stated in the report published on Tuesday.

Most of the releases were self-produced marketing announcements regarding minor product updates, token sales, or exchange listings, the team noted. Only around 2% reported significant news such as venture funding or acquisitions, which are the types of stories that would typically receive editorial coverage.

CoinDesk reached out to several press wires, but none had responded by the time of publication.

Pay to display

At the core is the connection between distribution services and websites. The wires function as a conduit, distributing content for a fee, while the websites charge to display them without editorial scrutiny, as stated in the report.

For the casual reader, it may appear as coverage from reputable media outlets, even if no journalist has reported the story and the claims within the release remain unverified.

This strategy is not exclusive to startups. Prominent exchanges frequently issue press releases announcing each token listing to cultivate a perception of ongoing activity, the researchers pointed out. There is no indication that the exchanges are engaged in any wrongdoing.

This scattergun approach, however, enhances visibility with search engines, clutters news feeds, and obscures the distinction between reporting and promotion, while granting otherwise unverified or high-risk projects an appearance of undeserved credibility.

“The fundamental mechanism of the crypto press release industry is piggybacking,” the study explained. “By channeling content through syndication networks, issuers evade the ‘newsworthiness’ filter of a newsroom and instead depend on the credibility of the distribution platform.”

In one instance from December, scammers employed fake branding to impersonate Circle Internet (CRCL), the issuer of the USDC stablecoin. The release promoted a fraudulent tokenized metals platform and directed users to what appeared to be a wallet-draining site. The release was debunked by CoinDesk, but only after it had been published on several news sites.

While some news outlets have begun to label or restrict press release content, the absence of clear standards and editorial filters continues to pose a risk in the crypto media landscape, the report concluded.