Celebrity and reality star Kim Kardashian is taking some guff from the U.K. Financial Conduct Authority (FCA) for a recent Instagram post involving cryptocurrency.
Kim Kardashian and the FCA Go Head to Head
The post discussed a new crypto asset known as Ethereum Max, and Kardashian is getting the stink eye after asking all her followers to consider joining the “Ethereum Max Community.” Charles Randell – head of the FCA – stated in an interview that this could have been the Instagram-crypto post with the largest audience in history. At the time of writing, Kardashian boasts more than 250 million followers on the social media platform.
Since the post was flagged, the reality star has come out to explain that it was simply an ad, though this isn’t making Randell back off. He stated:
She didn’t have to disclose 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 that fill the crypto exchanges.
He went on to say that Kardashian is not exactly in trouble, nor could he mention if Ethereum Max was a scam of sorts. However, he did explain the following:
Social media influencers are routinely paid by scammers to help them pump and dump new tokens on the back of pure speculation.
He also mentioned that some social media influencers have, in the past, discussed cryptocurrencies that did not even exist, which caused several people to invest fraudulently. From there, he unraveled a whole new argument that cryptocurrencies are usually not backed by fiat currencies or any other underlying assets that boast actual value.
Thus, traders should always be cautious when trading digital currencies and they should be prepared to lose all their money should they choose to move forward given that these currencies are new and have only existed for a few years and that it has been difficult to measure how they perform through a “full market cycle.” He said:
If you buy them, you should be prepared to lose all your money… There is no shortage of stories of people who have lost savings by being lured into the crypto bubble with delusions of quick riches, sometimes after listening to their favorite influencers, ready to betray their fans’ trust for a fee.
So Many People Buying Crypto They Probably Can’t Afford
According to the FCA, approximately 2.3 million residents of the United Kingdom are invested in various digital assets, and Randell is worried about this considering about 14 percent of these individuals used credit to purchase the tokens, meaning they borrowed money they likely didn’t have.
He is also for various social media platforms – such as Facebook, Twitter, Instagram and Tik Tok – adhering to certain guidelines that would ultimately prevent them from discussing or promoting certain financial offers.