The Central Bank of Ireland warned consumers about the dangers of crypto investments and “misleading advertisements”, including those promoted by social media influencers.
The Irish central bank issued a Tuesday warning that the warning was part a campaign by the European Supervisory Authorities. This group includes the European Securities and Markets Authority and the European Banking Authority. It also included the European Insurance and Occupational Pensions Authority. The Central Bank of Ireland stated that cryptocurrencies are “highly risky” and “speculative” for retail investors. It also warned people about “the risks of misleading advertising, especially on social media where influencers are being compensated to promote crypto assets.”
Derville Rowland (the central bank’s director general for financial conduct), stated that there is increasing advertising and aggressive promotion in Ireland and elsewhere in the EU of crypto asset investments. “Before buying crypto assets, think about your ability to afford to lose them . Also, be aware of the fact that you don’t have the same protections as if you were investing in regulated products 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
— March 22, 2022, Central Bank of Ireland (@centralbank_ie).
The warning from the central bank echoes those issued by global regulators and lawmakers who are cracking down against influencers selling cryptocurrencies. Spanish authorities announced in January regulations regarding advertisements for crypto investments and services. This specifically includes “products or service promoted via influencers.” In the United Kingdom, the Advertising Standards Authority has repeatedly warned crypto firms about alleged violations of advertisements that deal with digital assets.
Celebrities and influencers in the United States were involved with numerous alleged initial coin-offering scams that began in 2018. Kim Kardashian’s Instagram account published a story promoting the ERC-20 token EthereumMax in June 2021. This caused the price to rise before falling over 99%, leaving many retail investors in red. Actor Ben McKenzie has used his platform to protest these high-profile endorsements.
Related: Year of sponsorships – Celebrities who adopted crypto in 2021
Despite repeated warnings about crypto investments and advertising, some companies have opened operations in Ireland. Crypto exchange Gemini was granted a license to offer electronic money services in Ireland in early 2021 after opening its Dublin office. In September 2021 Binance opened three Irish subsidiaries, while Kraken and Ripple chose Ireland as their base for European operations.