The head of the UK’s Financial Conduct Authority, Charles Randall, spoke out against Kim Kardashian’s latest crypto ad. The Instagram advertisement was for Ethereum Max and was meant to encourage her followers to invest. According to Randall, the popular celebrity/influencer is misleading followers. SHe has over 250 million followers, and they risk following for a financial scam.
He explained that Ethereum Max is a speculative digital token that was just recently created a month ago. Moreover, it is formed by some unknown developers with very little credibility. He criticized the celebrity, saying that she was being irresponsible with her posts. The advertisements could have negative influence on followers. It could make them hold the assumption that they can make quick riches.
He emphasized that Ethereum Max was very different from the second-biggest cryptocurrency Ethereum. In fact, Kim Kardashian is promoting a token that has the properties of a typical pump and dump scam. In such a scenario, an insider tends to promote an investment so the price goes up. However, they only do so to sell and lower the investment’s value.
Randall clarified that he couldn’t say for sure if Ethereum Max is actually a scam. Nevertheless, the current situation has all the makings of one, according to him. He explained that often, scammers pay social media celebrities to help them in their pump and dump scheme.
They do this for new tokens, making the value rise on the basis of just speculation. To make matters worse, some influencers have turned out be promoting cryptocurrencies that don’t even exist in the first place.
The situation could end up being severe as Kim Kardashian’s crypto ad had possibly the biggest audience ever. It was a single instance of financial promotion which had the mind-boggling audience of 250 million people. He advises that people looking to invest should avoid doing so with speculative tokens that appear uninsured or are unregulated.
There are plenty of crypto critics because of digital currencies’ impact on the environment and their volatility. John Paulson, a billionaire who made his wealth investing in hedge funds, deeply criticized cryptocurrencies.
10The investor, known for having predicted the 2008 housing crash, said that it doesn’t offer any value. That is, besides the fact that it’s scarce. But he thinks that just because something is scarce, doesn’t make it valuable.
In a recent interview, he was asked if he believed in crypto. He said he wasn’t, and went on to explain that crypto is a bubble: a limited supply of nothing. He explained that the price will only go up as long as the demand outnumbers the supply. So once the liquidity dries up, the value will go back to zero.