The commencement of an £11 million digital marketing campaign by the UK’s Financial Conducts Authority is aimed at warning younger crypto investors about the risks in the sector.
The chief executive officer, Nikhil Rathi, gave a lecture at the ‘FCA’s Our Role and Business Plan webinar.’ He emphasized the FCA’s concerns about the growing number of younger participants in the risky cryptocurrency industry.
Rathi remarked that as technology is increasingly used to stimulate investment, a broader set of laws and safeguards must be implemented.
“When technology is used to promote new investments to consumers, it is essential that the right controls are in place. We’ve seen an explosion among younger people speculating on cryptocurrencies or other high-risk investments. In the last year, we published research that found nearly 2.5 million people in the UK had bought crypto assets.”, Rathi said according to the Draft of the speech.
Younger investors have been chastised for viewing risky digital ventures as opportunities for community building and pleasure.
Rathi has also used GameStop’s episode to demonstrate how younger investors are swayed by celebrity marketing on social media and do not consider “rationally” before investing.
To reach this generation of investors, the FCA is undertaking an £11 million digital marketing campaign aimed at alerting young investors about the high-risk nature of crypto.
The FCA’s anti-crypto stance is clear; they have frequently warned crypto investors of probable losses.
“Analysis this year found those ‘having a go’ at this kind of investing were younger and, proportionally, more likely from an ethnic minority. There is evidence too that, as with the GameStop episode, more people see investment as entertainment – behaving less rationally and more emotionally, egged on by anonymous and unaccountable social media influencers.
This is a category of consumer that we are not used to engaging with – 18 to 30-year-olds more likely to be drawn in by social media. That’s why we are creating an £11m digital marketing campaign to warn them of the risks.”, Rathi added.