A wave of criticism has emerged from prominent crypto influencers regarding Key Opinion Leader (KOL) investment rounds, with multiple figures publicly declaring them a "waste of money" and warning investors about potential scams disguised as exclusive opportunities.
The controversy erupted when several high-profile crypto personalities shared their negative experiences with KOL rounds, painting a picture of an investment vehicle that has largely failed to deliver promised returns while exposing investors to significant risks.
The KOL Round Reality Check
Wales, a crypto influencer with over 150,000 followers, delivered a scathing assessment of KOL rounds in a detailed thread. "99% of KOL rounds are a waste of money, especially late in the cycle," he stated, revealing that he had made money on only a single KOL investment while losing money or experiencing delays on numerous others.
The influencer provided a particularly damning example of industry practices, describing how a "very well known individual" approached him for a "last minute raise" with "limited spots available," following up five times and presenting it as an exceptional opportunity. Two weeks later, the token launched 90% below the price offered to KOL investors.
"If you don't have much experience with venture capital, it's best to stay away, most people are just trying to finesse you out of your money in a legal way," Wales warned his followers.
The Soft Scam Phenomenon
The criticism extends beyond poor performance to allegations of deceptive practices. Beast, another prominent crypto voice, observed that "KOL rounds are extremely risky investment avenues and more times than not it's more of a headache for both sides than a benefit to either."
Wales highlighted a particularly troubling aspect of the KOL ecosystem: the treatment of influencer investors by project founders. "Many founders downplay your investment (because you are not a VC) and act as if you should be eternally grateful that you have the opportunity to invest," he explained.
The structural issues run deeper than individual bad actors. As Wales noted, "Sometimes people are even trying to soft scam you," pointing to a systemic problem where KOL rounds have become vehicles for extracting money from influencers rather than legitimate fundraising mechanisms.
Late Cycle Timing Concerns
The timing of these criticisms is particularly significant, with multiple influencers noting that KOL rounds are "especially" problematic "late in the cycle." This suggests that what might have been profitable investment opportunities during earlier phases of the crypto market have devolved into money-losing propositions as the market matures.
The comparison to traditional venture capital is telling. Beast noted that "at least with angels you generally are limited to people who can help your business," highlighting how KOL rounds often lack the strategic value that genuine venture investment provides.
Industry Response and Alternatives
The criticism comes at a time when the crypto industry is grappling with broader questions about influencer involvement in investment decisions. The KOL round model, which emerged as a way for projects to gain social media promotion while raising funds, appears to have created perverse incentives that benefit neither investors nor legitimate projects.
- Token launches frequently occur at prices significantly below KOL round valuations
- Projects often treat KOL investors as secondary to institutional venture capital
- The promotional aspect of KOL rounds may conflict with genuine investment analysis
- Late-cycle timing makes most KOL opportunities particularly risky
The revelations have sparked broader discussions about the role of influencers in crypto investing and whether the KOL round model serves any legitimate purpose in the current market environment.
Looking Forward
As the crypto industry continues to evolve, the criticism of KOL investment rounds represents a potential turning point in how projects approach fundraising and marketing. The confluence of poor performance, questionable practices, and timing issues suggests that the KOL round model may be reaching its expiration date.
For retail investors who have been following KOL investment recommendations, the message from these prominent figures is clear: caveat emptor. The golden age of easy returns from following influencer investment advice appears to be over, replaced by a more mature but potentially treacherous landscape where due diligence and skepticism are essential survival tools.
