Charles Randell, chairman of the United Kingdom Financial Conduct Authority (FCA), has called for greater protection for vulnerable UK investors increasingly investing money in cryptocurrencies.
In a speech delivered Monday, the FCA chair highlighted the growing number of influencers who promote cryptocurrencies to their gullible followers, encouraging them to invest for fear of missing out (FOMO) on potential gains.
These “pump and dump” schemes are prevalent in the crypto market and have relatively gone unchecked by regulators, according to the FCA boss.
He singled out US celebrity Kim Kardashian as one who recently promoted a crypto token to her over 200 million followers. While the post disclosed that it was a promotion, she did not disclose that the random token was “created a month before by unknown developers.”
Charles Randell believes the token promoted by Kim Kardashian is “one of the hundreds of such tokens that fill the crypto-exchanges,” and urged investors to be wary of falling victim to similar promotions by celebrities and influencers.
“It’s difficult for regulators around the world to stand by and watch people, sometimes very vulnerable people, putting their financial futures in jeopardy, based on disinformation and fear of missing out,” the FCA Chair reportedly added.
The latest call comes amid a growing effort by the FCA to get a grip on the fast-growing cryptocurrency industry. Earlier research by the regulatory body estimates that there are 2.3 million UK adults that hold cryptocurrencies.
Last month, the FCA admitted that a significant number of crypto investors were young people. As a way to provide greater financial education, the FCA announced the launch of an £11M digital media campaign dedicated to warning young investors about the risks associated with crypto investing.
At the time, FCA CEO Nikhil Rath also noted that young investors view their crypto investors as "entertainment – behaving less rationally and more emotionally, egged on by anonymous and unaccountable social media influencers."