Kim Kardashian’s ad on Instagram for a cryptocurrency sparked concern from a United Kingdom financial watchdog.
Charles Randell, the chair of the UK’s Financial Conduct Authority said celebrities with influence and millions of social media followers are putting investors at risk by pushing unknown crypto tokens.
Back in June, Kardashian posted about a cryptocurrency called ethereum max to her over 200 million Instagram followers.
Randell argued that powerful celebs can lure investors to coins that might turn out to be scams.
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“In line with Instagram’s rules, [Kardashian] disclosed that this was an ad,” Randall told the Cambridge International Symposium on Economic Crime on Monday.
“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.”
He 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.”
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Randell reasoned “there is no shortage of stories of people who have lost savings by being lured into the crypto bubble with delusions of quick riches, sometimes after listening to their favorite influencers, ready to betray their fans’ trust for a fee.”
He called for there to be more monitoring of cryptocurrencies being promoted online and how regulators should fight back against “problematic content.”
Randell asked how regulators can sit back and watch vulnerable people being taken advantage of. “It’s essential to find the right balance between appropriate regulation to protect consumers and markets and encouraging useful new ideas in this space,” he said.
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A rep for Kardashian didn’t immediately return Fox Business’ request for comment.