UK’s Financial Regulator will spend $15M on a digital marketing campaign to warn people of crypto risks
United Kingdom’s financial regulatory body FCA (Financial Conduct Authority) launched a 15million dollars digital marketing campaign on 15th July to warn people about crypto investments’ risks.
On Thursday chief executive officer of FCA, Nikhil Rathi delivered a speech in the company’s event titled ‘The FCA’s Our Role and Business Plan Webinar’, “We’ve seen an explosion among younger people speculating on cryptocurrencies or other high-risk investments….18 to 30-year-olds are 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.”
During the announcement, the CEO mentioned that last year almost a 2.5million U.K residents hold crypto assets. This campaign will target a younger demographic. As technology crashes with increasing consumer freedoms, FCA will be confronted with judgments and trade-offs they have not come across before.
Why FCA’s digital marketing campaign is needed to warn young crypto investors?
Earlier research conducted by FCA in March 2020 discovered that “younger more diverse” investors in high-risk assets, including cryptocurrency, were “less aware of risks.” A Survey of this year found that those “having a go” at this kind of investing were younger and comparably, more likely from an ethnic minority.
In recent days, meme stocks and cryptocurrencies have detonated popularity among Gen Z. As a result, many young influencers have taken social media to promote cryptocurrencies. Last week TikTok banned sponsored crypto-related posts for its growing interest among young generations. According to Nikhil Rathi, “…more people see investment as entertainment- behaving less rationally and more emotionally, egged on by anonymous and unaccountable social media influencers.”
FCA also warned the young crypto investors that they “could lose all of their money.” That’s why the campaign announcement is not the sign of FCA taking a stand against crypto-space, but to issue a caution about Binance, the exchange which has been barred from offering derivatives in the U.K.
The FCA’s digital marketing campaign is coming directly behind the actions taken by the U.K’s Advertising Standards Authority (ASA) against cryptocurrencies’ advertisements that are considered “misleading and socially irresponsible.”
Apart from the digital marketing campaign, FCA also deemed to be more innovative and more adaptive data regulator over the next 5 years by “modernizing our systems- including becoming one of the first regulators in the world to move to the cloud.”