A British financial regulator concerned about the lack of rules for online promotion of cryptocurrencies has called out celebrity influencer Kim Kardashian West's use of her Instagram account to pitch Ethereum Max to her followers.
Charles Randell, chair of the Financial Conduct Authority, said Kardashian was recently paid to ask her 250 million Instagram followers to speculate on crypto tokens by "joining the Ethereum Max Community."
He noted Kardashian disclosed that the post was an ad, as required by Instagram's rules.
"But she didn't have to disclose that Ethereum Max – not to be confused with Ethereum – was a speculative digital token created a month before by unknown developers – one of hundreds of such tokens that fill the crypto-exchanges," Randell said in a speech Monday to the Cambridge International Symposium on Economic Crime, according to a transcript posted online.
Randell said he didn't know whether Ethereum Max was 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," Randell said. "Some influencers promote coins that turn out simply not to exist at all."
Email requests for comment were sent to Kardashian West's representative and Ethereum Max.
Until recently, digital currencies, like Bitcoin, have been left largely unregulated by major governments but recent comments by officials like Randell indicate they're now paying more attention.
Last month, Gary Gensler, the new chairman of the Securities and Exchange Commission, said investors need more protection in the cryptocurrency market, which he said was "rife with fraud, scams and abuse."
Randell said the Financial Conduct Authority had repeatedly warned about the risks of holding speculative tokens, which unlike mainstream investments aren't covered against loss by U.K. government compensation programs.
To help people avoid scams, Rendell says the authority publishes a list of unregistered crypto exchanges that it suspects are operating in the U.K.
He also said paid advertising, which is the main source of online investment scams, isn't covered by the U.K. government's upcoming online safety legislation but should be.
South Korea fines Meta $15 million for illegally collecting information on Facebook users
South Korea's privacy watchdog on Tuesday fined social media company Meta 21.6 billion won ($15 million) for illegally collecting sensitive personal information from Facebook users, including data about their political views and sexual orientation, and sharing it with thousands of advertisers.
It was the latest in a series of penalties against Meta by South Korean authorities in recent years as they increase their scrutiny of how the company, which also owns Instagram and WhatsApp, handles private information.
Following a four-year investigation, South Korea's Personal Information Protection Commission concluded that Meta unlawfully collected sensitive information about around 980,000 Facebook users, including their religion, political views and whether they were in same-sex unions, from July 2018 to March 2022.
It said the company shared the data with around 4,000 advertisers.
South Korea's privacy law provides strict protection for information related to personal beliefs, political views and sexual behavior, and bars companies from processing or using such data without the specific consent of the person involved.
The commission said Meta amassed sensitive information by analyzing the pages the Facebook users liked or the advertisements they clicked on.
The company categorized ads to identify users interested in themes such as specific religions, same-sex and transgender issues, and issues related to North Korean escapees, said Lee Eun Jung, a director at the commission who led the investigation on Meta.
"While Meta collected this sensitive information and used it for individualized services, they made only vague mentions of this use in their data policy and did not obtain specific consent," Lee said.
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