Kim Kardashian was selected by the UK’s Financial Conduct Authority (FCA) for pumping a crypto token that could put investors at risk. With 250 million Instagram followers, the FCA chairman said Kardashian’s cryptocurrency ad “may have been the single-audience financial ad in history.”
Kim Kardashian is promoting crypto tokens that could put investors at risk, the regulator said
UK Financial Conduct Authority (FCA) and Payment Systems Regulator (PSR) chairman Charles Randell highlighted celebrity Kim Kardashian in a new crypto fraud warning. Kardashian is an American media personality, celebrity, model, and businesswoman. She married pro-Bitcoin rapper Kanye West but filed for divorce earlier this year.
In his speech on Monday at the Cambridge International Symposium on White Collar Crime, Randell discussed “The Risks of Token Regulation” and the “Rules That Protect People From Investment Fraud and Fraud”.
He explained in detail how online platforms can provide advice on scams to help investors avoid wrong decisions: “We will work with online platforms that want to protect both consumers and their own brands – and we will be the ones that t play their part and destroy the trust of their users. ”Randell continued:
That brings me to Kim Kardashian. When she was recently paid to urge her 250 million Instagram followers to speculate on crypto tokens by “joining the Ethereum Max community,” it was possibly the largest single audience financial advertisement in history.
Randell admitted that under Instagram’s rules, Kardashian had to disclose that her post was an ad, but argued that “she didn’t have to disclose that Ethereum Max – not to be confused with Ethereum – was a speculative digital token, the one Created a month earlier by unknown developers – one of hundreds of such tokens populating crypto exchanges. “
The head of the FCA said:
Of course, I can’t tell if this particular token is a scam. But social media influencers are routinely paid by scammers to help them pump and dump new tokens on the back of sheer speculation. Some influencers promote coins that just turn out to be nonexistent.
Despite all the risks, Randell said that “the hype around them creates a strong fear of missing out.” [FOMO] from some consumers who may have little understanding of their risks. “
Randell continued to discuss regulations, stating, “It will take a lot of careful consideration to create a regulatory system that works in the decentralized world of digital tokens.”
He stated that “it is clear that the legislature must take three aspects into account”. The first is “how it is getting harder to use digital tokens for financial crime”. The second is “how to support useful innovations” and the third is “the extent to which consumers should be free to buy unregulated, purely speculative tokens and take responsibility for their decisions”.
The FCA chairman described:
In the meantime, it seems to me that there are two instances where regulators should have the power to take action to reduce the potential harm to consumers from purely speculative tokens, not least to ensure that confidence in the overall technology does not carry through Evil is destroyed actors in this room.
The first case is crypto promotions, he said, reiterating that “a surprisingly large proportion of people buying these speculative tokens seem to believe that they may already be regulated”. He then warned: “The second problem is the risk of contagion of the regulated business of authorized companies through unregulated activity in digital tokens.”
What do you think of the FCA chief challenging Kim Kardashian over pumping a crypto token? Let us know in the comment section below.
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