Saying cryptocurrencies unback by concrete assets are "essentially a Ponzi scheme," Gabriel Makhlouf asked parliament to ban ads targeting young investors.
Saying cryptocurrencies not backed by underlying assets are "essentially a Ponzi scheme," the Governor of Ireland's central bank asked lawmakers to ban crypto ads targeting young investors on Wednesday.
Gabriel Makhlouf told a parliamentary committee unbacked cryptocurrencies have "no social value whatsoever" and while the risk they pose to the broader financial system is "limited," consumers need to be protected, Bloomberg reported.
Likening crypto investing to gambling, Makhlouf said people should be allowed to gamble, but warned "most of the time when you gamble, you're actually losing," Reuters added. He said:
"There's a reasonable number of young adults who have put their money into crypto and there is an uncomfortable level of advertising that is targeted at that cohort. If you could find a way, I would recommend that adverts to that cohort are banned."
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Makhlouf is not alone in that opinion. A year ago, the Monetary Authority of Singapore effectively banned all crypto ads in public places and online, limiting cryptocurrency marketing to companies' own websites and social media accounts. Hiring third parties like social media influencers was also banned.
Across the Irish Sea, the U.K.'s Financial Conduct Authority announced a crackdown on crypto ads about a year ago, banning "misleading" crypto ads and making them subject to the same rules for marketing other financial products like securities and insurance products.
It also joined forces with the Advertising Standards Authority (ASA) which cracked down hard on crypto ads around that time, calling it a "red alert" priority. It banned ads by companies like Coinbase and Papa John's pizza chain that failed to actively and strongly warn about the risks of investing in crypto. That included suggesting crypto investing is low risk or suitable for anyone. Nor could the ads promote a sense of urgency or fear of missing out.
The FCA also banned the sale of crypto derivatives outright in January 2021, saying they were not suitable for retail investors. Earlier this week, the Regulatory Policy Committee, an official industry advisory board called that prohibition unjustified and called for its reversal.