Hello and welcome to this week's edition of Overbit News; in our first story of the week, we're covering the ongoing saga of regulators wanting to curtail celebrities from promoting cryptocurrencies.
According to UK regulators, celebrities such as Kim Kardashian are endangering investors by promoting unfamiliar cryptocurrencies.
The UK’s Financial Conduct Authority's chair thinks online influencers frequently advocate cryptocurrency schemes, endangering retail investors by promoting obscure crypto tokens. In June, Kardashian advertised a crypto token called EthereumMax on her Instagram account.
In June, Kardashian promoted the little-known cryptocurrency EthereumMax to her over 200 million Instagram followers. The chair of the UK's Financial Conduct Authority said Kardashian's post was probably a cryptocurrency promotion with the single most extensive audience reach in history, and he said it was a prime example of how celebrity influencers can lure investors toward coins that could turn out to be scams, in a speech on the difficulties of regulating crypto.
The FCA head stated that regulators should have more authority over the cryptocurrency industry, focusing on deceptive cryptocurrency advertising and the risks posed by regulated financial firms trading in unregulated digital tokens.
Although celebrities like Paris Hilton and DJ Khaled have endorsed crypto projects, some regulators claim that scammers routinely pay social media influencers to help them pump and dump new coins based on sheer guesswork.
To regulate the space, regulators will continue to look into frauds and marketing of virtual currency, which leads us to our next topic, in which El Salvador continues to grow its Bitcoin engagement.
El Salvador has announced they own 400 bitcoins, according to President Nayib Bukele, one day before the country legally recognises it as legal money alongside the US dollar, per a report from Reuters. Bitcoin briefly surpassed 1.49 per cent to $52,680 on Monday evening, according to Refinitiv Eikon data.
Bukele announced earlier on Monday that El Salvador had purchased its first 200 bitcoins, adding on Twitter that "our brokers will be purchasing a lot more as the deadline approaches."
Later that day, he stated, "We now have 400 bitcoin."
El Salvador is set to legalise bitcoin on September 7, according to Bukele, which will save Salvadorans residing abroad millions of dollars in commissions on money sent home.
However, studies suggest that Salvadorans are apprehensive of adopting bitcoin, fearful of the cryptocurrency's volatility, which opponents believe may create legal and financial concerns for financial institutions.
The announcement of this law over the summer indeed sent shockwaves over the industry, signalling how far it has come in just a short decade. There have been many mixed responses, of course, demonstrated by the studies mentioned above. We will keep a close eye and do our best to keep you updated on how this rollout plays out in the near future.
Thanks as always for reading Overbit News. Take care until next time!