FCA seeks more power over crypto promotions

UK watchdog chairman drew specific attention to a post by Kim Kardashian

The Financial Conduct Authority (FCA) is seeking further powers to control cryptocurrency promotions as the City regulator warned of celebrity-endorsed tokens.

Charles Randell, FCA chairman, said recently that more action is needed in order to protect consumers from the speculative nature of the digital assets available now.

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Randell drew specific attention to Kim Kardashian when making a point about risky investments and scams being advertised by celebrities.

“There are no assets or real world cashflows underpinning the price of speculative digital tokens, even the better known ones like Bitcoin, and many cannot even boast a scarcity value,” FCA Chair Charles Randell said in a speech.

“We’ll need two streams to tackle the problem of online financial scams: appropriate regulation, including self-regulation by online platforms and robust enforcement by the authorities; and greater consumer awareness about online scams.”

“It’s essential to find the right balance between appropriate regulation to protect consumers and markets and encouraging useful new ideas in this space,” Randell said.

Watchdogs across the globe are increasingly fretting over the rise of digital currencies which remain largely unregulated.

There are concerns that amateur investors could risk losing vast sums of money as they purchase highly volatile assets.

“Giving speculative tokens a high risk price tag is likely to make crypto currency dealing and investment very expensive and could limit the number of new institutional entrants,” Susannah Streeter, an analyst at Hargreaves Landsdown, said.

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