Chairman of Financial Conduct Authority of U.K. singled out celebrity Kim Kardashian in a new warning about crypto-token scams. The chairman Charles Randell discussed “The risks of token regulation” & “rules which protect people from investment fraud and scams.”
The chairman discussed this in a speech yesterday at the Cambridge International Symposium. He talked in detail about how online platforms can offer bad advice to help investors avoid bad decisions. On this subject, he offered a solution saying:
“We’ll work with online platforms who want to protect both consumers and their own brands – and we’ll call out those who aren’t playing their part and are destroying the trust of their users.”
“Which brings me on to Kim Kardashian. 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.”
While the chairman admitted that due to Instagram’s rules, Kardashian had to disclose her crypto-token post as an ad. However, he argued that she didn’t disclose about the crypto. In fact, that specific crypto is a speculative digital token that some unknown developers created in a month. Moreover, as we all know, crypto exchanges have tons of tokens that fill such criteria.
He also added:
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.
Post this, Randell stated that they’ll have to create regulations to avoid such potential crypto-token scams.
He detailed that the legislators have to consider three issues. Firstly, they need to make it difficult for digital tokens to have a mark in financial crime. Secondly, they have to figure out how they can support useful innovations in the future. Finally, and most importantly, they have to restrict how consumers can buy unregulated, purely speculative tokens and take responsibility for such purchases.
Overall, all of the points mentioned above carry weight. In fact, if we ever want to witness the true adoption of digital tokens into the economy, regulators have to draft some laws regarding them. Otherwise, it would result in terrible losses for a lot of people.