The Financial Conduct Authority is spending £ 11 million on a digital marketing campaign to warn investors about the risks of investing their money in cryptocurrencies.
Speaking when the regulator released its new business plan on July 15, CEO Nikhil Rathi said the FCA remained concerned about how many investors, particularly those belonging to younger demographics and ethnic minorities, were investing savings in classes. of assets that could potentially leave them penniless. .
“We have seen an explosion of young people speculating in cryptocurrencies and other high-risk investments,” Rathi said. “As with the GameStop episode, more people see investing as entertainment … prompted by anonymous and irresponsible influencers on social media.”
Rathi noted that FCA research shows that some 2.3 million Britons were now invested in cryptocurrencies, and “controls” were needed when technology was used to promote such risky options.
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“That is why we are creating an £ 11 million digital marketing campaign to warn them of the risks,” he said. “As we have repeatedly made clear, crypto investors must be prepared to lose all their money.”
Previous FCA warnings have largely been unheard – only 10% of people who were aware of cryptocurrencies were also aware that the FCA had issued consumer warnings on its website when the watchdog conducted a survey.
Rathi did not elaborate on how the regulator would spend its £ 11 million budget. Actor Arnold Schwarzenegger and soccer expert Clive Tyldesley spearheaded recent high-profile campaigns on the PPI deadline and pension fraud, respectively.
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However, in a shift from its historical focus, the FCA said it would no longer be restricted to what it calls its regulatory “perimeter” – which includes its official mandate – when it comes to its supervision of financial markets.
While the FCA was able to ban the sale of crypto derivatives to retail consumers in October, it does not formally regulate crypto tokens themselves, but this shift in focus could mean a broader brief for the regulator.
“Even where we have no powers, we will not turn a blind eye,” Rathi said.
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