People should be aware of “the risks of deceptive ads, notably on social media, where influencers are paid to advertise crypto assets,” according to the central bank.
The Central Bank of Ireland has issued a warning to consumers regarding the dangers of crypto investments, as well as “misleading” marketing, such as those promoted by social media influencers.
The warning was part of a campaign organised by the European Supervisory Authorities, which include the European Securities and Markets Authority, the European Banking Authority, and the European Insurance and Occupational Pensions Authority, according to a notice issued by Ireland’s central bank on Tuesday. The Central Bank of Ireland advised that cryptocurrencies were “extremely dangerous and speculative” for retail investors, adding that people should be wary of “misleading ads, notably on social media, where influencers are paid to promote crypto assets.”
“Increasing levels of advertising and aggressive promotion of crypto asset investments are being seen in Ireland and across the EU,” said Derville Rowland, the central bank’s director general of financial conduct. “Think about whether you can afford to lose all of your money before investing in crypto assets […] People should also be aware that they do not have the same protections as they would if they invested in a regulated product if something goes wrong.”
The Central Bank has today issued a fresh warning ❗️ on the risks of investing in crypto assets, as part of a European-wide campaign by the European Supervisory Authorities: https://t.co/G3joUvctrO pic.twitter.com/D5ygXYdpZj
— Central Bank of Ireland (@centralbank_ie) March 22, 2022
The central bank’s warning is similar to that of worldwide regulators and lawmakers who are cracking down on cryptocurrency influencers. The Spanish government established limits for ads on crypto investments and services in January, stating that “items or services promoted via influencers” would be prohibited. The Advertising Standards Authority of the United Kingdom has already issued warnings to crypto businesses for potential infringement in ads involving digital assets.
Many of the reported initial coin offering frauds in 2018 were linked to celebrities and influencers in the United States. In June 2021, Kim Kardashian’s Instagram account shared a storey promoting the ERC-20 token EthereumMax (EMAX), causing the price to skyrocket before plummeting by more than 99 percent, putting many retail investors in the negative. Actor Ben McKenzie, at least one American celebrity, has used his platform to speak out against high-profile endorsements.
Despite numerous warnings about cryptocurrency investments and ads, some companies have opened offices in Ireland. Gemini, a crypto exchange, obtained a licence to conduct electronic money services in the country after launching its Dublin headquarters in early 2021. In September 2021, Binance opened three companies in Ireland, while Ripple and Kraken chose the country as the base for their European operations.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.