American businesswoman and social activist Kim Kardashian has been criticized for promoting cryptocurrency on Instagram.
The criticism came from the head of the Financial Conduct Authority (FDA), the UK’s financial regulator.
Charles Rundle said Kardashian “asked his 250 million followers to speculate on cryptocurrency” when promoting the Ethereum Max ad.
Cryptocurrency is more than just a digital currency
Randle described the coin as “a fictitious digital token created a month ago by unknown developers.”
Digital influencers have been accused of harboring “delusions of rapid wealth”.
Randle spoke about the issue during the Cambridge International Symposium on Financial Crimes.
The FCA chief said Kardashian’s Instagram post, which he indicated was correctly tagged as an ad, may have been the “financial ad with the largest audience reach in history.”
The token being promoted as Ethereum Max should not be confused with the cryptocurrency Ethereum.
“I can’t tell if this token is specific or not [Ethereum Max] Randall said it was a scam.
“Social media influencers are routinely paid by scammers to help them inject new tokens and are discarded due to sheer speculation. Some influencers are promoting non-existent coins,” he said.
Bitcoin: Find out the most popular cryptocurrencies and how they work
The BBC has reached out to Ethereum Max and Kim Kardashian for comment, but has not received a response.
Randle said that about 2.3 million Britons currently own cryptocurrency and 14% of them use credit to buy them, “which increases their exposure to financial losses.”
He said FCA has repeatedly warned Britons of the risks of holding “speculative codes” that are not regulated by the FCA or covered by any compensation scheme.
“If you buy it,” he said, “you should be prepared to lose all your money.”
Randle said there was still room to inform consumers that their investments might not be protected “from the harsh and often misleading advertising techniques of some crypto companies.”
