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The head of Ireland’s central bank, Governor Gabriel Makhlouf, this week made comments likening digital currencies like BTC to gambling, calling them nothing more than a Ponzi scheme.
Makhlouf is the latest in a line of central bankers to have expressed concern about the volatility of digital currencies. He warned those speculating on them to be prepared to lose everything, echoing Bank of England Governor Andrew Bailey’s 2021 warning.
“If you put your money into unbacked crypto, you should be prepared to lose it all,” said Makhlouf.
Central bank bosses have specifically taken aim at ads targeting young people in Ireland, calling for action to be taken to ban them where possible.
This afternoon, Governor Makhlouf and Deputy Governor Vasileios Madouros appeared before the Committees on Finance, Public Expenditure and Reform, and Taoiseach. Read more here – https://t.co/XzIMeUjczJ
— Central Bank of Ireland (@centralbank_ie) January 25, 2023
Regulators are coming down hard on the digital currency industry
After the FTX boom that ended the disaster in 2022, regulators around the world expressed concern about the suitability of digital currencies as investments and their potential impact on the wider economy.
While Governor Makhlouf said the risks to the wider Irish economy were “minimal”, his concern for retail speculators was the chorus of hymn sheets most regulators seem to be singing. After dozing off at the wheel for the past few years, those tasked with protecting the little guy have finally moved in to examine the reckless behavior of players like Three Arrows Capital and FTX, which have been hurting their citizens.
It’s getting clearer by the day that regulators are waking up and realizing that their citizens are ducks for the hustlers, fraudsters, and liars who are happy to sell their dreams and pocket their hard-earned cash. US Securities and Exchange Commission (SEC) chairman Gary Gensler has repeatedly called for more protections for digital currency speculators, prompting global regulators to move in that direction.
Digital currency advertisements are often dishonest and misleading
Around the world, there are already rules and regulations about what constitutes acceptable advertising. Many ads have been pulled before for dishonest or inappropriate content, however it seems that ads for digital currency schemes and scams have largely slipped through the net in many places.
However, not all dishonest advertisers escape consequences. Recently, the following actions have been taken regarding counterfeit digital currency advertisements.
In December, the UK advertising watchdog found that Coinbase (NASDAQ:COIN) and Kraken had used misleading advertising to send warnings to more than 50 other companies.
The US Federal Trade Commission, which is tasked with protecting consumers, launched investigations into several companies without providing details.
Investors are suing FTX for false advertising linked to yield generating accounts.
Several celebrities, including big names like Kim Kardashian, have been penalized for their involvement in promoting digital currency.
If only action had been taken sooner
Finally, regulators appear to be taking on the duties of the individuals and companies behind these lies. If only it had happened a few years earlier, many people could have been saved from the financial catastrophe that occurred in 2022.
While we can’t turn back the clock, retail speculators would do well to heed warnings from central bankers like Gabriel Makhlouf going forward. Unlike BTC anarchists and altcoin promoters on Twitter, they actually have education in finance and economics, and their assessment that most digital currencies are essentially worthless is 100% accurate.
Watch: Development of the BSV On-chain Ecosystem in Europe
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