London regulators are worried about everyone investing in cryptocurrencies online. That includes Kim Kardashian, beauty and fashion magnate and influencer.
Charles Randell, chairman of the UK Financial Conduct Authority, spoke about Kardashian in a colorful speech on Monday (6).
He started by suggesting that the internet was full of… excrement.
“The Augean stables were not cleaned 30 years ago, when Hercules was put in charge of cleaning them. For 30 years, 3,000 animals have done in these stables what 3,000 animals have to do,” Randell said. “The first website was published 30 years ago. And like Augias stables, over the last 30 years the internet has been filled with a great deal of… well, let’s call it ‘troublesome content’.”
He then turned his attention to Kardashian, who, he noted, recently spoke about “Ethereum Max” to his more than 250 million Instagram followers.
“Following Instagram rules, she revealed it was an ad,” Randell said. “But she didn’t need 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 these tokens that populate crypto-exchanges.”
Randell acknowledged that he cannot tell if this particular token is a fake. But he emphasized that regulators need to do more to control this kind of online activity. Platforms like Facebook (FB), Twitter (TWTR) and TikTok, he said, also need to “move forward”.
“The hype surrounding [das criptomoedas] generates a powerful fear of losing some consumers who may have little understanding of their risks,” Randell said.
For potential customers, he also had a clear reminder: Crypto investments are a huge gamble.
“These tokens are not FCA regulated,” Randell said. “If you buy them, you must be prepared to lose all your money.”
A record high in encryption prices earlier this year brought hundreds of thousands of new investors to the group. The FCA now estimates that 2.3 million Britons hold cryptocurrencies, up from 1.9 million in 2020.
But regulators remain concerned about massive volatility and fraud, and are debating whether they should play a bigger role in monitoring the industry. Gary Gensler, chairman of the US Securities and Exchange Commission, has also called for greater investor protection in recent speeches.
“This asset class is fraught with fraud, scams and abuse in certain applications,” Gensler told the European Parliament’s Committee on Economic and Monetary Affairs earlier this month.
(Translated text. Read the original in English here.)