Kim Kardashian and crypto FOMO: Why regulators worry

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Charles Randell, chairman of the UK’s Financial Conduct Authority, called Kardashian on Monday in a colorful speech.

He began by suggesting that the internet was full of dung.

“The Augean stables had not been cleaned for 30 years when Hercules was commissioned to clean them. For 30 years 3,000 animals did in these stables what 3,000 animals have to do,” said Randell. “The first website was released 30 years ago last month. And like the Augean Stables, over the past 30 years the internet has filled with a lot of…

He then turned his attention to Kardashian, who he noted recently hooked up “Ethereum Max” to 250 million Instagram followers.

“As per Instagram’s rules, she revealed it was a #AD,” Randell said. “But she didn’t have to reveal 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 filling crypto exchanges.”

Randell admitted that he couldn’t tell if this particular token was a scam. But he stressed that regulators need to do more to curb this type of online activity. Platforms like Facebook (FB), Twitter (TWTR) and TikTok, he said, must also “step up”.

“The hype around [cryptocurrencies] generates a powerful fear of missing out on some consumers who may have little understanding of their risks, ”said Randell.

For potential consumers, he also had a clear reminder: crypto investments are a huge gamble.

“These tokens are not regulated by the FCA,” Randell said. “If you buy them you should be prepared to lose all your money.”

A record rise in crypto prices earlier this year drew hundreds of thousands of new investors to the fold. The FCA now estimates that 2.3 million Britons are cryptocurrency holders, up from 1.9 million in 2020.

But regulators remain concerned about massive volatility and fraud, and question whether they should play a bigger role in overseeing the industry. Gary Gensler, chairman of the US Securities and Exchange Commission, also called for greater investor protection in recent speeches.

“This asset class has been riddled with frauds, scams and abuse in some applications,” Gensler told the European Parliament’s Committee on Economic and Monetary Affairs earlier this month.

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