In a speech warning against the risks of token regulation, the Chair of the Financial Conduct Authority (FCA), Charles Randell, mentioned Kim Kardashian, who had recently been paid to ask her 250m followers on Instagram to speculate on crypto tokens.
When speaking about the celebrity in his speech, Charles Randell said: “When she was recently paid to ask her 250 million Instagram followers to speculate on crypto tokens by ’joining the Ethereum Max Community‘, it may have been the financial promotion with the single biggest audience reach in history.
“In line with Instagram’s rules, she disclosed that this was an #AD. But she didn’t have to disclose that Ethereum Max – not to be confused with Ethereum – was a speculative digital token created a month before by unknown developers – one of hundreds of such tokens that fill the crypto-exchanges.
“Of course, I can’t say whether 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 pure speculation. Some influencers promote coins that turn out simply not to exist at all.
“There are no assets or real world cashflows underpinning the price of speculative digital tokens, even the better-known ones like Bitcoin, and many cannot even boast a scarcity value.
“These tokens have only been around for a few years, so we haven’t seen what will happen over a full financial cycle. We simply don’t know when or how this story will end, but – as with any new speculation – it may not end well.”
Industry reaction
Regarding the speech made by the Chair of the FCA, Susannah Streeter, Senior Investment and Markets Analyst at Hargreaves Lansdown, commented: ‘’It’s unusual to hear the chair of Britain’s financial watchdog dedicate a big chunk of his speech to superstar reality TV queen Kim Kardashian – but it shows just how concerned the FCA is about the level of financial promotion of crypto assets on social media.
“The watchdog is clearly horrified at the lack of controls implemented by major social media platforms and has urged them to crackdown on posts which aren’t clearly identified as promotions. It reckons given the seriousness of the situation legislation forcing them to do so should be the solution, highlighting that the current Online Harms bill just won’t go far enough.
“The FCA is singing from the same song sheet as many other international regulators. It sees investing in cryptocurrencies as extremely high risk. The watchdog had already been quick to warn investors that they could risk losing all their money if they indulge in cryptocurrency trading. It’s worried that too many financially vulnerable people are being lured into ‘get rich quick’ schemes, with 14% getting into debt to speculate in crypto assets.
“The FCA has now warned that by bringing cryptocurrencies into the regulatory sphere, it risks adding more perceived legitimacy to the currencies.”
El Salvador recently adopted BitCoin as legal tender, demonstrating a recent attempt to legitimatise a cryptocurrency.
“Now it appears to be throwing its weight behind recommendations made by the influential Basel committee which brings together regulators from around the world,” continued Susannah. “If banks and other regulated financial institutions dabble in crypto, the committee is considering making them put aside enough capital to cover 100% of potential losses.
“Giving speculative tokens a high-risk price tag is likely to make cryptocurrency dealing and investment very expensive and could limit the number of new institutional entrants into the crypto world.
“It’s likely lower financial buffers would be needed for stable coins, which are seen as less volatile as they are pegged to currencies like the dollar. It is clear the FCA wants to push the financial industry towards these digital assets, seeing them as a useful way to improve the payments market away from the crypto Wild West.

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