UK regulator says celebrities such as Kim Kardashian are putting investors at risk by pushing unknown crypto tokens
Kim Kardashian promoted an unknown crypto token to her followers in June.
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- Celebrities like Kim Kardashian are putting investors at risk by promoting crypto tokens, a UK regulator said.
- The chairman of the Financial Conduct Authority said that online influencers regularly promote crypto scams.
- Kardashian advertised a crypto token called Ethereum Max on her Instagram account in June.
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The UK’s financial watchdog said celebrities like Kim Kardashian are putting retail investors at risk by promoting obscure crypto tokens.
Kardashian promoted the little-known cryptocurrency Ethereum Max to her more than 200 million Instagram followers in June.
In a speech about the difficulties of regulating crypto, the chairman of the UK’s Financial Conduct Authority said Kardashian’s post was likely the single-largest financial promotion in history.
However, he said it was a prime example of how prominent influencers can lure investors into coins that could turn out to be scams. Paris Hilton and DJ Khaled are among the numerous other celebrities who have sponsored crypto projects.
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“In accordance with the rules of Instagram, [Kardashian] announced that it was a complaint, ”Charles Randall told the Cambridge International Symposium on Economic Crime on Monday.
“But she didn’t have to reveal that Ethereum Max – not to be confused with Ethereum – was a speculative digital token created a month earlier by unknown developers – one of hundreds of such tokens that fill the crypto exchanges.”
Randall added, “Obviously 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 dispose of new tokens on the back of pure speculation. Some influencers advertise coins that just turn out to be nothing. “
The FCA chairman said regulators should have more authority over the crypto world, with an emphasis on disreputable cryptocurrency advertisements and the risks posed by regulated financial firms trading unregulated digital tokens.
Randall also expressed concern that regulating cryptocurrencies could give them too much legitimacy in the eyes of consumers. However, he concluded that more rules were needed, despite saying that “it would take a lot of careful consideration to create a regulatory system for crypto”.