In an update earlier today, global tech conglomerate Meta shared news of its latest moves surrounding digital collectibles. From September 29th, subsidiaries Facebook and Instagram will now allow users to link their virtual wallets with their accounts and also share non-fungible tokens. Users Across 100 Countries Can Access New Meta Feature Everyone on @instagram and @facebook can now share their digital collectibles in the US, and on Instagram in the previously announced 100+ countries,” Meta announced in a tweet. https://twitter.com/MetaNewsroom/status/1575486040349245446?s=20&t=TpIDHfYcRCtVRMNrwYhWiA…
Britain’s Financial Conduct Authority (FCA) said that developing regulations for digital currencies requires efficient planning over time. The announcement comes after public consultation on regulating crypto-assets.
Some celebrities also came into the limelight to promote questionable cryptocurrencies. Most receive vast sums of money to push new altcoins to their followers. It works because their fans trust them to promote legit products. However, most of these have turned out to be pure scams.
The Need for Powers to Regulate Crypto
In a speech, Charles Randell, FCA Chairperson, said that no assets are backing crypto. Hence, most cryptocurrencies cannot boast a scarcity value as they are highly volatile. Besides, he stated that there is no way of knowing about the future of crypto assets. However, with the new speculation, it may not go well at all.
Randell said that he finds two cases where regulators should have powers to take action. First, to mitigate the harm caused by crypto-asset promotions. The other is to stop contagion at authorized firms. It originates from unregulated digital token activities.
He identified Kim Kardashian as among the celebrities pushing obscure crypto tokens. In turn, this is putting retail investors at risk and in direct harm’s way.
Ethereum Max Promotion Issues
Kardashian advertised Ethereum max to her fans. She has a fan base of over 200 million. Consequently, Randell said it is the single most extensive audience reach in history. Hence, you can predict what the outcome was when she promoted it back in June.
Kardashian is an example of how enthusiastic investors may face exposure to significant risks. DJ Khaled and Paris Hilton have also promoted crypto projects in the past.
In her defense, she said that it was an ad, in line with Instagram rules. Randell mentioned, in response, that he wouldn’t know whether Ethereum max is a scam. What happens is that scammers have paid influencers on social media. The advertisements by these influencers assist in pump and dump for emerging tokens. Such coins run on the back of mere speculation, and the crypto may not even exist at all.
FCA Registration Awarding Restrictions
FCA will not award registration to companies that will not explain fundamental issues. Such issues include who handles running and other relevant information on the business.
So far, FCA has banned Binance from providing services in Britain. That’s because the platform is not compatible with appropriate supervision. Also, they had not met all regulatory requirements. However, Binance has stood on its ground that it complies with FCA requirements.
The global Basel Committee of banking regulators is currently doing consultations. The consultation revolves around capital charges on digital tokens. The outcome report should appear soon.