As cryptocurrencies increasingly enter the mainstream, investors should be wary of speculative crypto tokens pushed by celebrities and social-media influencers.
That was the warning from the Financial Conduct Authority’s chair Charles Randall, who mentioned a recent crypto promotion by media personality and socialite Kim Kardashian West in his pleas for investors to be careful.
“When she was recently paid to ask her 250 million Instagram followers to speculate on crypto tokens by ’joining the Ethereum Max Community‘, it may have been the financial promotion with the single biggest audience reach in history,” Randall said in prepared remarks for a speech to the Cambridge International Symposium on Economic Crime on Monday.
Kardashian “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 said.
MarketWatch has attempted to reach out to Kardashian’s representative for comment.
While Randall said he didn’t know whether that particular token was a scam, he noted that “social media influencers are routinely paid by scammers to help them pump and dump new tokens on the back of pure speculation. Some influencers promote coins that turn out simply not to exist at all.”