Charles Randell, head of the British financial regulator FCA, has criticized influencer and actress Kim Kardashian for promoting the Ethereum Max crypto token. He did not want to judge whether this was a dubious offer, he said in a speech on Monday – but it is now common for fraudsters to hire celebrities to advertise their dubious tokens widely. This creates a hype that gives less well-informed people the impression that they are missing out on a great opportunity.
Randell complained that there are now a number of cases in which people have been “lured into the crypto bubble” by their favorite influencers and have lost their savings in the process. Kardashian began promoting Ethereum Max on the Instagram platform in June. The postings were identified as “#AD” in principle as advertising. It is not known how much money Kardashian made from it. She currently has 251 million followers on Instagram. “It might have been the biggest audience financial advertisement in all of history,” said Randell.
He also emphasized that the FCA, which he runs, does not currently regulate such tokens and that they are not protected by state deposit insurance either. Anyone who invests must expect to lose money. In general, crypto regulation is a difficult field; There are innovations in the field that you don’t want to choke off. Nevertheless, rules are needed that protect people from fraud.
Steven Seagal and the Bitcoiin
Ethereum Max is not an independent cryptocurrency, but an ERC-20 token based on Ethereum that was launched in May. Influencer advertising has apparently not yet led to any major course records. The token, which is currently quoted at 0.00000002257 euros, had a short all-time high in May, then plunged and since then has practically only moved sideways in price. In addition to Kardashian, the sponsorship of boxers like Floyd Mayweather is also likely to gain popularity.
Such influencer advertising is nothing new in the crypto world. In the previous big hype about cryptocurrencies in 2017/2018 in particular, several celebrities held out their faces and their reach. Among other things, the It girl Paris Hilton advertised an initial coin offering. In 2018, Floyd Mayweather was fined more than 600,000 US dollars by the US financial regulator SEC for publicly speaking out in favor of crypto projects without disclosing that it was paid advertising.
Some like the action film veteran Steven Seagal are backing the wrong horse: The makers of the “Bitcoiin” (sic!) He was promoting simply let the project down after the currency units were sold. Seagal also received a fine from the SEC for failing to disclose that he had done paid advertising.