Kim Kardashian has been criticised for promoting head ‘asked her 250 million followers to speculate on crypto tokes’ by promoting an advert for Ethereum Max.
He called it ‘a speculative digital token created a month before by unknown developers’.
And he accused influencers of fuelling the ‘delusions of quick riches’.
Mr. Rendel was speaking to the Cambridge International Symposium on Economic Crime.
The FCA chairman said Ms. Kardashian’s Instagram post, which he noted had been correctly flagged as an ad, may have been the ‘financial promotion with the single biggest audience reach in history’.
The promoted token Ethereum Max was, he stressed, not to be confused with the Ethereum cryptocurrency.
‘I can’t stay whether this particular token [Ethereum Max] is a scam’, he said.
‘But social media influencers are routinely paid by scammers to help them pump and dump new token on the back of pure speculation. Some influencers promote coins that turn out simplu not to exist at all’, he said.
Mr. Randell said about 2.3 million Britons currently hold cryptocurrency and he said 14% of them also use credit to purchase them – ‘thereby increasing the exposure to loss’.
He said the FCA had repeatedly warned about the risk of holding ‘speculative tokens’, which are not regulated by the FCA or covered by and compensation scheme.
‘If you buy them, you should be prepared to lose all your money’, he said.
Mr Randell said there was a case for regulation of promotions to address consumers’ misconceptions that their investments were protected – and ‘the relentless and often misleading advertising techniques of some crypto businesses’.