An Instagram post by Kim Kardashian urging her Instagram followers to join the “Ethereum Max community” highlights the role of social media in promoting the cryptocurrency.
Charles Randell, head of the UK Financial Conduct Authority, said Mrs Kardashian’s post “could have been the financial promotion with the largest audience reach in history”.
But he criticized the ad, saying there was no need to tell fans that EthereumMax was a one-month speculative digital witness.
“I can’t say if this particular testimony is a scam,” Randell said in a speech Monday at the Cambridge International Symposium on Economic Crimes, according to a copy posted online. “But scammers usually pay social media influencers to help them pump and throw new chips out of pure speculation. Some influencers promote currencies that simply do not exist at all.
A representative of EthereumMax said that “Mrs Kardashian’s post was simply intended to publicize the project and its usefulness.”
“Altcoins [non-Bitcoins] in general, they are speculative and EthereumMax is not excluded from this macro truth, “the representative said in an emailed statement.” However, what makes EMAX different is our commitment to transparency and communication “.
The FCA currently has a limited role in registering UK-based cryptographic asset exchanges for anti-money laundering purposes. FCA critics, through a speech, about an individual’s actions are a bit unusual, the industry noted.
But the speech suggests the FCA is trying to expand its authority in regulating the growing cryptocurrency sector, noting that the Kim Kardashian case supports that effort, said Jeffrey Alberts, a partner at law firm Pryor Cashman LLP in New York.
“By identifying such cases, which would be aware of politicians and voters, this increases the chances that they will be given this authority to expand their regulation,” Alberts said. The speech indicates that the FCA may be seeking authority to protect investors from speculative tokens, Alberts added.
Ms. Kardashian, known as one of the stars of the reality TV series “Keeping Up With The Kardashians,” did not immediately respond to a request for comment on the regulator’s speech.
The speech can also be seen as a warning to British investors, as Randell said in his speech that around 2.3 million Britons currently have such tokens, according to Ross Delston, a lawyer specializing in issues against money laundering.
“I was also trying to warn UK citizens that investing in these chips can be not only speculative, but also direct fraud,” Delston said.
Write to Allison Prang to [email protected] and Mengqi Sun to [email protected]
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