Virtual currencies and tokens have attracted interest from amateur investors lured by stellar gains but who also risk big losses and being scammed.

“As we live more and more of our lives online, we can’t allow online business to operate in ways we wouldn’t tolerate with any other business,” Charles Randell, head of Britain’s Financial Conduct Authority (FCA), said yesterday.

“That includes rules which protect people from investment fraud and scams.”

Kardashian had advertised virtual token Ethereum Max in June in a story feed on her Instagram account, which has more than 200 million followers.

Randell stressed that Ethereum Max was not connected to Ethereum, which is the world’s second-most popular cryptocurrency after Bitcoin.

“When she was recently paid to ask her 250 million Instagram followers to speculate on crypto tokens by ‘joining the Ethereum Max Community’, it may have been the financial promotion with the single biggest audience reach in history,” Randell said.

He noted that the post was flagged as an advertisement in line with Instagram’s rules.

“But she didn’t have to disclose that Ethereum Max – not to be confused with Ethereum – was a speculative digital token created a month before by unknown developers.”

Randell stressed that he did not know whether Ethereum Max was a scam. He added, however, that “social media influencers are routinely paid by scammers to help them pump and dump new tokens on the back of pure speculation”.