Definition ∞ Social media risk is the potential for adverse consequences arising from the use or misuse of social media platforms within the digital asset space. This includes risks such as misinformation, market manipulation through “pump and dump” schemes, phishing attacks, and reputational damage from negative sentiment. Social media’s rapid information spread can amplify these risks.
Context ∞ Social media risk is a prominent concern for both individual investors and digital asset projects, given the platforms’ influence on market sentiment and information dissemination. Regulators are increasingly scrutinizing social media activity for signs of illicit coordination or deceptive practices. Developing robust community management and verification protocols is essential for mitigating these risks.
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