Brazil’s ban on social media site X has hit the Brazilian crypto community hard, as many in the blockchain industry — from researchers to influencers, fundraisers, conference organizers and accelerators — use the site as a critical means of communication and promotion.
On Aug. 30, almost 22 million users were cut off from X in Brazil when Brazilian Supreme Court Justice Alexandre de Moraes found X to be allowing and promoting misinformation related to former Brazilian President Jair Bolsonaro.
The ban has caused Elon Musk’s social media company to lose one of its biggest markets.
X users in different countries as of April 2024. Source: Statista
Victor Cioffi, growth manager and core team member of crypto accelerator Solana Superteam Brasil, told Cointelegraph that X is the most popular social media platform among Brazilian youth, as it is mainly used for posting informal random thoughts.
However, the crypto industry uses it as a professional tool to promote companies and ideas, and most importantly, it’s the portal through which they can engage with the global crypto audience:
“X is used to reach the global audience, so if you don’t have X for your marketing strategy, it’s like losing an arm.”
Cioffi explained that the ban on X in Brazil forces you to choose between being an outlaw to communicate and promote your product to the outer world and abiding by the rules and scrambling to connect on other social media platforms.
Brazilian crypto industry loses audience and revenue
A study conducted in 2024 by cryptocurrency price tracker CoinGecko found that X is the leading social media platform for crypto users to gather valuable intel and is, by far, their preferred social media site.
For influencers and crypto firms, X offers a large audience for launching campaigns and provides an easy entry point for new potential clients.
João Ferreira, co-founder and CEO of Brazilian decentralized finance (DeFi) app Picnic, told Cointelegraph that his company had already lost “half of its reach” as X was their primary communication platform.
Ferreira said that “as a founder, in terms of fundraising and getting in contact with VCs and other influential individuals, it definitely hurts quite a bit.”
Most people get their crypto news from X. Source: CoinGecko
Casta Crypto, a Brazilian crypto educator and content creator, told Cointelegraph that X was his primary channel for communicating with new projects and initiatives and his medium for engaging with his audience through regular interactions.
After the ban, he said that his audience has effectively dropped by about two-thirds, as the other third of viewers come from YouTube.
A famous Brazilian crypto influencer, who wished to remain anonymous to avoid possible repercussions, told Cointelegraph that they “cannot sleep for several days” because they felt that the “treasure” of their audience might be in jeopardy. X was their most prominent social media platform in terms of engagement.
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Furthermore, as an influencer, they said that they were beginning to feel lonely “as it’s a way to connect with people.”
They said that the X ban had sent their paranoia levels through the roof, joking that they had begun to think the recent suspensions of Brazilian crypto influencers’ Instagram accounts could have something to do with the X ban.
The anonymous influencer told Cointelegraph that “everyone is trying to find alternative solutions.”
They observed a surge in several platforms, including YouTube Community posts, Substack posts, Instagram, Farcaster, Threads, Nostr and Bluesky, which has added more than 1 million new users since the X ban.
Casta Crypto admitted that he has tried alternatives, but “so far, it was not possible to replicate these dynamics [of X] anywhere else.”
He lamented that the Brazilian community “had not only lost a significant amount of audience but of coordination and a very valuable network effect.”
Crypto conferences and DAOs suffer
Crypto conferences are the backbone of the cryptocurrency industry.
Daniela Zschaber, a product manager at blockchain developer firm Blockful and organizer of the crypto conference ETH Floripa, told Cointelegraph that the X blackout is significantly affecting her business.
ETH Floripa will take place in February 2025; however, she is worried that, less than six months away from the event, “any access to X would be critical at this stage.”
“We’ve lost important data such as event engagement levels, potential sponsors and interested partners [...] without X; we lose the network effect within the Web3 space.”
Zschaber said that their events, even if they can sometimes be smaller and oriented to Brazilian attendees, typically always reach maximum attendance.
However, without X, the smaller events they are hosting, such as an upcoming conference in Curitiba, have only about half the desired attendance as they’ve lost a vital tool to coordinate.
Decentralized autonomous organizations (DAOs) are global and decentralized organizations that require digital tools to coordinate effectively.
Zschaber said that her business Blockful, which deals directly with DAOs, has lost its main channel of communication. She said that the firm had lost access to essential information from stakeholders, partners and other DAOs.
While DAOs typically use Discord for coordination, Zschaber said that major updates are often shared on X in real-time.
It’s not that they’re totally in the dark; “it’s about the practicality of accessing information,” making the process slower and clunkier.
This lack of real-time access to important information can also affect everyday Brazilian crypto holders.
The anonymous influencer noted that many crypto protocols use X to update users on possible security breaches and hacks. Brazilian victims of hacks like that of DeFi staking protocol Ether.fi wouldn’t receive alerts in real-time, increasing the likelihood of being scammed, they told Cointelegraph.
As the situation worsens and the ban continues, many have debated moving abroad to avoid these issues despite many not wishing to leave the country. Ferreira said he’s “actively looking to move out of Brazil,” as the X ban “was kind of the last straw for me.”
Brazilians debate X ban
The debate over the X ban is still raging in Brazil. Some have formed the narrative as a struggle between billionaires and the sovereignty of the Brazilian state, while others see it as an issue of free speech.
In Brazil, we do not have X anymore since midnight.
— Marcel van Hattem (@marcelvanhattem) August 31, 2024
I am tweeting this with VPN.
This tweet may cost me almost 10,000 USD according to the decision of tyrant @alexandre de Moraes, friends with @LulaOficial : every Brazilian that post on X from now on will be fined R$ 50,000…
João Victor Archegas, founder of the research group on digital constitutionalism and content moderation ModeraLab and coordinator at the Institute of Technology and Society, explained to Cointelegraph that freedom of speech has several limitations in accordance with the Brazilian Constitution of 1988.
Archegas mentioned that freedom of speech “can be legitimately restricted to protect other equally important fundamental rights.”
He said that the core debate in Brazil is whether the ban after X refused to comply with Brazilian law is proportional.
While some view the ban as disproportionate and an outright attack on the freedom of speech, Archegas said that “one cannot lose sight of the fact that X forced its way out by outright defying the Brazilian Supreme Court in various cases.”
Archegas admitted that the Supreme Court’s decisions can and should be criticized, but they “do not point to any signs of deliberate, widespread political censorship in the country.” Like other countries, Brazil is learning how to cope with some of the negative externalities of platforms like X, said Archegas.
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Although there is a legitimate concern about judicial overstepping — especially when fining those caught using a VPN to access X — all companies operating in Brazil need to use the available legal avenues to seek redress. Defying the court’s authority is a non-starter.
While the debate continues, many fear X will never return to its original state due to self-censorship. Crypto Casta believes that “self-censorship is a growing trend in the whole of the Western world since the emergence of the cancel culture and its weaponization as the unwritten norm for regulating speech and acceptable world views.”
For Crypto Casta, the problem is that once active voices challenge unwritten norms and the fear of “cancellation” is no longer a deterrent, the state will step in to enforce these norms.
Ferreira is pessimistic, believing that X may never return to its original state and believing that most people won’t care.