City watchdog chief doubles down on cryptocurrency clampdown

The chief of the City watchdog has doubled down on it stepping up oversight of high risk cryptocurrency products and firms engaging in severe misconduct.

In a speech delivered at the Lord Mayor’s City Banquet at Mansion House, Nikhil Rathi, chief executive of the Financial Conduct Authority (FCA), said the regulator will apply “a bolder risk appetite in dealing with serious misconduct.”

Rathi warned consumers not to take cryptocurrency investment advice from the likes of Kim Kardashian and other social media influencers, a point reiterated by the FCA’s chair, Charles Randell, in another speech.

Concerns over people not realising social media posts promoting cryptocurrency investments are paid advertisements mounting. Data published by Skipton Building Society shows over 18m UK consumers trust investment advice published on social media.

Kardashian recently sent a paid post out to her more than 250m Instagram followers promoting a newly created cryptocurrency token called Ethereum Max. 

Rathi said the FCA was pursuing a more agile approach to overseeing the UK’s financial services industry. 

“We have often been criticised for acting slowly or with too much risk aversion. This is changing,” he said.

The FCA will step up its clampdown on data-heavy businesses to produce better outcomes for consumers, Rathi said.