UK regulator claims celebrities like Kim Kardashian are putting investors at risk by pushing unknown crypto tokens

• Celebrities like Kim Kardashian are putting investors at risk by advertising crypto tokens, a UK regulator has said.

• The chairman of the Financial Conduct Authority said online influencers regularly promote crypto scams.

• Kardashian announced a crypto token called ethereum max on his Instagram account in June.

• See more stories on the Insider business page.

The UK’s financial watchdog has said celebrities such as Kim Kardashian are putting retail investors at risk by pushing obscure crypto tokens.

Kardashian announced the little-known cryptocurrency ethereum max to its more than 200 million Instagram followers in June.

In a speech on the difficulties of regulating crypto, the chairman of the UK’s Financial Conduct Authority said Kardashian’s post was probably the financial promotion with the largest audience in history.

Still, he said it was a great example of how famous influencers can lure investors into pieces that could turn out to be scams. Paris Hilton and DJ Khaled are among many other celebrities to have promoted crypto projects.

Read more: Former SEC Chairman Jay Clayton told us why he is joining the advisory board of Fireblocks, unicorn of crypto infrastructure, and shares his take on the regulation of digital assets.

“In accordance with Instagram’s rules, [Kardashian] revealed that it was an advertisement, “Charles 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 earlier by unknown developers – one of hundreds of such tokens filling crypto exchanges. . “

Randall added: “Of course I can’t say if this particular token is a scam. But social media influencers are regularly paid by scammers to help them pump and dump new tokens on the back of the pure. speculation. Some influencers promote plays that spin – just so they don’t exist at all. “

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The FCA chairman said regulators should have more power over the crypto world, with a focus on unsavory cryptocurrency promotions and the risks arising from regulated financial firms trading in non-digital tokens. regulated.

Randall was also concerned that the regulation of cryptocurrencies would give them too much legitimacy in the eyes of consumers. Still, he concluded that more rules are needed, although he said it will take “a lot of careful thought to develop a regulatory regime” for crypto.

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