A watchdog of the UK warned the regulators that over regulation on the crypto market may lead to backfire attacks. And suggested taking action on actual things which are needed.
Charles Randell, Chair of the FCA and Payments Systems Regulator, wrote a speech for the Cambridge International Symposium on Economic Crime. In the speech, Charles mentioned that there are big needs to work on customers’ protection which are investing in the crypto market and they are unaware of its risk.
Overall, Charles tried to say that instead of the highly restricted regulation on the crypto services, regulators should work on how to protect the investors.
Chalres took the reference of the “Ethereum Max ”, which is a new branded token launched and it was promoted by instagram influencer. And the developer behind this token is unknown.
Chalres said that, it is not a matter whether The Max is a scam or not, but promotion on such platforms through Social media influencers for those things which are not known, is a big problem. And the regulators needed to work on this thing, how they can prohibit such kinds of promotions.
Chalres tried to say that followers will follow their ideals or heroes of the social media and probably they will invest without knowing the reality of the projects/tokens, whether genuine or not.
Also, Charles took the reference of UK’s Citizens Investment in crypto.
According to the records, there are 2.3 million UK’s citizens which have Investment in crypto, out of this 12% of the crypto Investors thinks that the brought crypto assets are protected by the FCA.
“So why should we regulate purely speculative digital tokens? And if we do regulate these tokens, will this lead people to think that they are bona fide investments? That is, will the involvement of the FCA give them a ’halo effect’ that raises unrealistic expectations of consumer protection?”