Investors and crypto connoisseurs have always warned the masses about the risks of speculative digital tokens and that includes the head of the U.K.’s financial watchdog who specifically singled out this post to warn people about the stakes.
The celebrity in question has a history of promoting a range of controversial items and was previously married to a rap billionaire who is a crypto enthusiast. The post she made didn’t break any Instagram rules of promotion since she labeled it as #ad but that couldn’t stop Charles Randell, chair of the FCA, from slamming the socialite on the misinformed and dangerous nature of her post. Randell was speaking to Cambridge International Symposium on economic crimes and he mentioned this incident, according to BBC, saying:
“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.”
“I can’t say whether this particular token [Ethereum Max] is a scam.”
“But 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.”
Misleading ad on Instagram
Recently, the aforementioned controversy sparked around an Instagram post made by a celebrity piqued the discussion of how celebrities endorsing misinformed crypto-related things put investors at risk. Her post marked as “#AD” said: “Are you guys into crypto???? This is not financial advice but sharing what my friends just told me about the Ethereum Max token! A few minutes ago Ethereum Max burned 400 trillion tokens — literally 50% of their admin wallet, giving back to the entire e-max community. Swipe up to join the e-max community.”
“Of course, I can’t say whether this particular token is a scam. But social media influencers are routinely paid by scammers to help them pump and dump new tokens on the back of pure speculation,” Charles Randell concluded.
Very little information is available about the sources and developers of Ethereum Max, (not to be confused with Ethereum), due to its still nascent stage as it was only developed in the May of this year, which makes it harder to determine its legitimacy.
Misleading posts such as this can jeopardize the digital asset trade of millions of buyers and investors alike due to the massive traction it gains. The celebrity in question getting called out for pumping a controversial token is apt in view of the market regulations to ensure safe and fair crypto trade.