Cryptocurrency is slowly taking over the world and it’s not surprising to see Instagram celebrities, or “influencers”, also joining the movement. Kim Kardashian, one of Instagram’s biggest influencers, also joined the list by discarding a sponsored post of a cryptocurrency token. The entrepreneur shared a paid Ethereum Max ad in an Instagram story in June. Needless to say, the ad managed to get attention, but it also raised some eyebrows, especially with a UK regulator.
Following Kardashian’s post, the UK’s Financial Conduct Authority (FCA) has warned investors against falling into the hype around new celebrity-guaranteed cryptocurrency tokens. The body explained that many of these tokens could turn out to be fake. The problem arose during a speech by FCA President Charles Randell at the Cambridge International Symposium on Economic Crime.
In his speech on Monday, September 6, Randell highlighted Kardashian’s Instagram story. While acknowledging that he revealed the post was an advertisement, Randell said: “There is no shortage of stories of people who lost savings being lured into the encryption bubble with get-rich-quick delusions, sometimes after listening to their favorite influencers, ready to betray the trust your fans for a fee. ”
Referring to her post, he further said that Kardashian was promoting “a speculative digital token created a month earlier by unknown developers – one of hundreds of those tokens that fill in the encryption exchanges.”
Randell added, “When she (Kardashian) 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 largest audience reach in the world. story”.
The FCA official explained that because these tokens have only been around for a few years, it’s difficult to predict their behavior over a financial cycle.
Randell said: “We just don’t know when or how this story will end, but – as with any new speculation – it might not end well.” Randell, however, said he cannot confirm whether the token Kim Kardashian endorsed is a fraud or not.
The FCA has also asked tech giants Facebook, Microsoft, Twitter and TikTok to join Google in not promoting advertisements for financial products that are not authorized by an FCA-authorized company.