Kim Kardashian has been accused by the British Financial Ethics Authority (FCA) of pumping a crypto token that could endanger investors. With 250 million followers on Instagram, the chairman of the FCA said that it could have been the financial promotion with the greatest impact in history.
Kim Kardashian promotes a crypto token that could endanger investors, the regulator said
Charles Randell, chairman of the UK’s Office of Financial Conduct (FCA) and payment systems regulator (PSR), praised celebrity Kim Kardashian in a new warning against crypto fraud. Kardashian is an American media personality, celebrity, model and businesswoman. She married pro-BTC rapper Kanye West, and filed for divorce earlier this year.
Speaking at the International Economic Crime Symposium in Cambridge, Randell discussed the “risks of token regulation” and “rules that protect people from investment fraud.”
Describing in detail how online platforms can provide fraud advice to help investors avoid making bad decisions, he said: “We will work with online platforms that want to protect consumers and brands.” Randell continued:
“Which brings me to Kim Kardashian. When she was recently paid to ask her 250 million followers on Instagram to join the ETH Max community, it may have been the financial promotion with the greatest reach in history. ”
Randell claimed that Instagram rules required Kardashian to disclose that her post was an advertisement, but “she did not have to reveal that Ethereummax – not to be confused with ETH – was a speculative digital token created a month before by unknown developers – one of hundreds of such tokens that now fill crypto exchanges. “
The head of the FCA said:
“Of course I can’t say if this particular token is a scam. But social media influencers are routinely paid by fraudsters to help them pump new tokens against the backdrop of pure speculation. ”
Randell said that “the hype surrounding them is causing a strong FOMO on the part of some consumers who have little or no understanding of their risks.”
“There are stories of people who came to the cryptocurrencies with delusions of rapid enrichment after listening to their favorite influencers, ready for money to betray the trust of their fans.”
A surprisingly large proportion of consumers who invest in speculative cryptocurrencies mistakenly believe that they are regulated, Randell said. He stressed that consumers have no financial protection if they invest in cryptocurrencies.
Randell continued the discussion on regulations, saying that “Developing a regulatory regime that is effective in a decentralized world of digital tokens will require a lot of careful consideration.”
He clarified that lawmakers must consider three issues. The first is “how to make it difficult to use digital tokens for financial crime”. The second is “how to foster useful innovation” and the third is “the extent to which consumers should be able to buy unregulated, purely speculative tokens and take responsibility for their decisions.”
The FCA President added:
“I think there are two cases where regulators should have the power to take steps to reduce potential harm to consumers through purely speculative tokens and, last but not least, to ensure that confidence in the overall technology is not undermined in this sector.”
The first is the promotion of tokens and the second is the risk of affecting the regulated business of authorized companies by unregulated activities in the field of digital tokens.