The central bank warned people to be mindful of “the risks of misleading advertisements, particularly on social media, where influencers are being paid to advertise crypto assets.”
The Central Bank of Ireland issued a warning to consumers about the risks around crypto investments in addition to “misleading” advertisements, including those pushed by influencers on social media.
In a Tuesday notice, Ireland’s central bank said the warning was part of a campaign organized by the European Supervisory Authorities, made up of the European Securities and Markets Authority, the European Banking Authority, and the European Insurance and Occupational Pensions Authority. The Central Bank of Ireland said that cryptocurrencies were “highly risky and speculative” for retail investors and warned people to be mindful of “the risks of misleading advertisements, particularly on social media, where influencers are being paid to advertise crypto assets.”
“In Ireland and across the EU we are seeing increasing levels of advertising and aggressive promotion of crypto asset investments,” said Derville Rowland, the central bank’s director general of financial conduct. “Before you buy crypto assets, you need to think about whether you can afford to lose all the money you invest […] People should also be aware that if things go wrong, you do not have the protections you would have if you invested in a regulated product.”
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 echoes that of global regulators and lawmakers cracking down on influencers peddling cryptocurrencies. In January, the Spanish government announced regulations for advertisements on crypto investments and services, which specifically included “products or services promoted via influencers.” The United Kingdom’s Advertising Standards Authority has also repeatedly warned crypto firms or alleged violations for advertisements dealing in digital assets.
In the United States, celebrities and influencers were associated with many of the alleged initial coin offering scams from 2018. Kim Kardashian’s Instagram account posted a story shilling the ERC-20 token EthereumMax (EMAX) in June 2021, causing the price to spike before falling more than 99% and leaving many retail investors in the red. At least one American celebrity, actor Ben McKenzie, has used his platform to push back against these types of high-profile endorsements.
Amid repeated warnings over crypto investments and advertisements, some firms have set up operations in Ireland. After opening the doors to its Dublin office in early 2021, crypto exchange Gemini received a license to provide electronic money services in the country. Binance established three subsidiaries in Ireland in September 2021, while crypto firms Ripple and Kraken chose the nation as the base to launch their European operations.