Why the FCA has declared war on FOMO

By Ian Silvera

You’ll need your own translator when entering the world of cryptocurrency. For the uninitiated, it’s a place where FUD (fear, uncertainty and doubt) has become a by-word for any critical analysis of blockchain or blockchain adjacent technology/projects, while the phenomenon of FOMO (fear of missing out) has been embraced on the forums.

Users on the infamous Reddit forum WallStreetBets often regale each other with stories of FOMOing into trades and cryptocurrency bets – some go extremely well, creating small fortunes, while others go terribly badly, making the users online heroes for the day.

The self-described degenerates, their YOLO (you only live once) mindset and their lexicon have caught the eye of UK financial regulator the FCA, which has now effectively described war on FOMO.

“It’s difficult for regulators around the world to stand by and watch people, sometimes very vulnerable people, putting their financial futures in jeopardy, based on disinformation and fear of missing out,” Charles Randell, chair of the FCA, warned.

Randell also pointed to the increasing use of social media platforms to promote cryptocurrency (Twitter is the go-to network beyond Reddit), with Kim Kardashian joining Floyd Mayweather in backing a new token on her 250m-strong Instagram followers.

The regulator has become increasingly hands-on in its approach to the cryptocurrency industry, banning the world’s biggest exchange in June and claiming that Binance is not capable of being supervised properly and poses a significant risk to consumers.

Why? Because crypto adoption is increasing in the UK. The FCA estimates that 2.3 million adults now hold cryptoassets (up from 1.9 million last year), with 14% of them also using credit to purchase them. The US’ own regulator the SEC has taken a swipe at Coinbase, with a potential lawsuit over its plans to launch a lending programme on its platform.

Coinbase chief Brian Armstrong has hit back, describing the SEC’s behaviour as “sketchy”. All of this regulatory scrutiny is increasingly reminiscent of social media’s run-in with US lawmakers throughout 2018 to 2020 and especially after Donald Trump’s win in 2016. Expect some more weird and awkward moments if this row reaches the US Congress.

“Senator, have you ever YOLO’d?”