The U.K.’s financial services regulator has said more powers are needed to regulate cryptocurrency promotions and advertisements over concerns that there is still serious scope for investors to be misled about the options available to them. FCA raised the concerns via a speech delivered by chairman Charles Randell, who said the body should be given more teeth to tackle rogue and misleading promotions in the sector.
The regulator would be able to clamp down on advertisements with more power.
FCA chairman Charles Randell said that with more powers, the regulator would be able to clamp down on advertisements that had overstepped the mark, allowing it to better protect investors. In particular, he said it was “absolutely imperative” that promotions accurately reflect the high levels of risk involved in digital currency investments while also not giving the impression that tokens were operating in a regulated environment. “And, since these promotions are nearly all online and often made by unidentifiable promoters in other jurisdictions, and regulations in this area must cover paid-for advertising on online platforms,” he added.
“No assets are underpinning the price of speculative digital tokens.”
On digital currency assets more generally, the FCA chairman noted there was often nothing concrete underpinning the speculative price of digital assets, giving rise to further risk for would-be investors in the space. “There are no assets or real-world cashflows underpinning the price of speculative digital tokens, even the better-known ones like [BTC], and many cannot even boast a scarcity value.” He also referenced recent promotions from Kim Kardashian on Instagram, which saw the promotion of Ethereum Max to over 250 million followers on the platform.