Did you catch the cryptocurrency ad that aired during the Oscars on Sunday night?
You may have forgotten about it as the commercial aired in a world before the slap, so allow me to jog your memory.
The ad was for cryptocurrency exchange, Crypto.com, and its fundraising drive for Ukraine. Titled "The Essentials," the commercial ran through a list of necessities such as bread, medicine, batteries, and shelter before finally landing on the word "Hope."
"In Ukraine, the basics are now the essentials," says the on-screen messaging. The ad then tells viewers that Crypto.com is "matching donations" to the Red Cross Red Crescent in order "to alleviate the humanitarian crisis in Ukraine." Finally, the commercial provides users with an address where they can donate: Crypto.com/donate.
Certainly, it looks like a nice message followed by a kind gesture from a large company in response to Russia's ongoing war in Ukraine.
It's also pretty plainly a PR stunt meant to promote Crypto.com and cryptocurrencies as a whole. Why? Because cryptocurrency is completely unnecessary for these donations. Don't take it from me. This is what Crypto.com's own FAQ section on its Ukraine donation page states:
"Your cryptocurrency donation will be converted to TUSD (or such other cryptocurrency as may be) after each successful donation to avoid fluctuation risks in the value of the donated cryptocurrency, and then be converted from TUSD to EUR after the campaign period," reads the Crypto.com website.
So, basically, Crypto.com will take your donations in the form of any cryptocurrency listed on its exchange and immediately convert it to a stablecoin, a type of cryptocurrency that's pegged to fiat currency (i.e. the U.S. dollar). The reason for this is that most cryptocurrencies like Bitcoin and Ether are highly volatile and fluctuate greatly in price. One's $50 crypto donation may not be valued anywhere near $50 in the next day, hour, or even minutes.
But, hold up. That's not the last step Crypto.com will take in order to get your crypto donation to the Red Cross' efforts in Ukraine. Crypto.com continues to note that the converted stablecoin will then finally be converted to Euros (i.e. fiat currency) at the end of the campaign before it's finally sent to the Red Cross.
Translation: The Red Cross never receives crypto. Crypto.com turns it into fiat money before sending it to the organization. One could have just donated with their credit card or debit card and avoided all the excess transfers and transactions and energy waste that occur when donating via crypto.
To Crypto.com's credit, the crypto exchange does provide a direct payment link to Red Cross in order to do just that. Although, this option is not promoted to the extent the crypto payment option is. And there's an obvious reason for that.
To donate via cryptocurrency (or even via a NFT purchase), Crypto.com requires users to have an account with the company. That's certainly one way to grow its user base and possibly retain a percentage of those people as regular customers. A similar strategy has been used by other exchanges like FTX and Kraken when those two companies announced they were sending free cryptocurrency to Ukrainians earlier this month.
One thing not mentioned in the commercial? More information about those matching donations. On the website, Crypto.com states they will match up to $1 million. Again, sure, a generous thing to do. But we should mention that the crypto exchange recently purchased the rights to rename the name of the Staples Center to the Crypto.com arena for $700 million over a 20-year period. The exchange also spent millions – as much as $7 million per 30 seconds of ad time – on a Super Bowl ad this year as well.
Crypto.com has said it is waiving "any charges or fees" on donations. According to the exchange, "100% of the crypto donations (subject to any third-party processing fees) will be transferred to the Red Cross Red Crescent in support of people affected by the humanitarian crisis in Ukraine and impacted countries." That's a very good thing and shows the company won't be directly profiting in any way from these donations.
Mashable has reached out to Crypto.com to find out if the fees being waived also cover spreads per trade, basically a markup on the crypto trade price itself, to ensure as much of an individual's donation is going to the Red Cross. We will update this post when we hear back.
Last week, Snopes uncovered a fake Facebook ad campaign launched by fraudsters posing as Crypto.com. The scam tried to trick Facebook users into donating cryptocurrency to Ukraine, which in actuality would have gone to the scammers. Crypto-related scams have flourished since Russia's invasion of Ukraine began in February. While this Crypto.com fundraising drive is legitimately from the official exchange, it's clear that there are many good reasons why people would be uncomfortable donating via cryptocurrency.
Readers can donate directly to the Red Cross or check out Mashable's list of other legitimate charitable organizations focusing on helping refugees fleeing Ukraine.
Topics Cryptocurrency Politics
