Kim Kardashian’s Crypto Instagram Ad Censured For Possibly Misguiding Decisions
Image via Kathy Hutchins / Shutterstock.com
On Monday, the chairman of the UK’s Financial Conduct Authority (FCA) and the Payment Systems Regulator (PSR), Charles Randell, warned against potential cryptocurrency “investment fraud and scams” that may have come in the form of… Kim Kardashian?
His speech at the Cambridge International Symposium on economic crime included a discussion on risks associated with “token regulation” and “rules which protect people from investment fraud and scams.”
Kardashian’s Instagram story was called out in particular, which was posted to over 200 million followers in June. Describing it as a financial promotion with probably “the single biggest audience reach in history,” he highlighted the risks associated with the advertisement.
Although Instagram’s guidelines dictate that she needed to disclose the story posts were a paid advertisement, they didn’t state she needed to make the audience aware of the currency.
Ethereum Max, not to be confused with the popular and established Ethereum, was still a speculative token created a month ago by “unknown developers.”
He clarified that it didn’t mean the token was definitely a scam, but cites his wariness on how influencers are “routinely paid by scammers to help them pump and dump new tokens on the back of pure speculation.”
It’s a dangerous game to play, especially when the 250 million potential people reached by that ad doesn’t signify 250 million people who are well-versed in investing in crypto.
The “hype” created by a celebrity endorsement also may evoke “a powerful fear of missing out” from consumers who don’t buy into the currency, scam or not. Some of these coins turn out to be totally non-existent.
Randell warns that people who buy the “speculative tokens” may not be aware that they haven’t already been regulated. Additionally, the unregulated activity might then bleed into previously authorized business.
In these two cases, he states, regulators should retain power to “reduce the potential harm to consumers from purely speculative tokens, not least to ensure that trust in the overall technology isn’t destroyed by bad actors in this space.”
[via Bitcoin.com, image via Kathy Hutchins / Shutterstock.com]
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