- FCA is allocating £11 million ($15 million) to a digital marketing campaign to warn investors of the risk involved in buying crypto.
- The campaign will target people from 18 to 30 years old who usually spend a lot of time on social media.
Recently, a survey conducted by U.S. financial group Charles Schwab revealed that UK youths are twice as likely to buy cryptos like Bitcoin than stock. According to the survey, 51 percent of youth aged between 18 and 37 have invested in cryptos compared to 25 percent who have invested in equities. In contrast, only 8 percent of Britons aged above 55 years have invested in cryptos.
The growing popularity of this asset class among the youth has been a cause for concern as most of them do not realize how risky the investment is. The Bank of England governor Andrew Bailey recently advised the youth that they could lose everything in crypto investment. In response to the rising concerns, Financial Conduct Authority (FCA), has made money available to get the youth educated on the risk involved in crypto.
According to the FCA, £11 million ($15 million) is being allocated to a digital marketing campaign to warn crypto asset holders, especially the youth on the risk involved.
Nearly 2.5 million people in the UK have purchased crypto
This follows a publication that disclosed that nearly 2.5 million people in the UK had purchased crypto-assets. Analysis of the report revealed that the majority of the crypto investors are younger people with a proportion of them being from ethnic minorities. According to the CEO of FCA Nikhil Rathi, people see investment as entertainment.
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.
The campaign will most likely target people from 18 to 30 years old who are usually drawn to social media. According to Rathi, crypto investment is very risky, and investors must understand the worst possible scenario.
As we have repeatedly made clear: investors in crypto-assets should be prepared to lose all their money. As technology collides with increasing consumer freedoms, we will be confronted with judgments and trade-offs we’ve not come across before. We’ll also be confronted with deep ethical questions brought on by the use of machine learning and artificial intelligence to target consumers.
The FCA has over the past few months become very active in the crypto space, ordering crypto firms to register with them, and embarking on operations to crack down on misleading marketing advertisements of crypto investments. The likes of Coinfloor and Luno have been ordered to take down their advertisements.