The co-founder and CEO of Klarna, Sebastian Siemiatkowski, speaks on stage at the TechCrunch Disrupt Berlin 2019 on December 11, 2019.
Noam Galai | Getty Images
LONDON – The head of European fintech giant Klarna says he is “deeply concerned” about posts promoting Bitcoin on Twitter and says regulators should act to protect people from possible losses.
Sebastian Siemiatkowski told CNBC that while he thinks Bitcoin is an “interesting technology,” he fears that retail investors may be drawn to tweets urging people to buy the cryptocurrency without thinking about the risks involved.
“When I search for Bitcoin on Twitter, I can see people writing: ‘Buy it now or you will miss the greatest opportunity of your life,'” Siemiatkowski said in an interview on Wednesday.
“If I took Klarna shares and advertised with similar texts, I would get a fine or even go to jail,” he added. “I am very surprised why regulators are not chasing these elements.”
Bitcoin has been on a wild ride lately. It’s up more than 400% in the past 12 months, with backers pointing to increased demand from institutional buyers. Bitcoin’s surge has reminded some market watchers of its monster rally in 2017 when the digital coin cost nearly $ 20,000 only to lose 80% of its value the following year.
Crypto cops say things are different this time. Mainstream investors and big companies like Tesla are now buying bitcoin. Tesla CEO Elon Musk recently believed in Bitcoin and briefly added the hashtag #bitcoin to his Twitter bio – a move that led to a 20% increase in the price of cryptocurrency – and called it a “good thing” in a discussion about the lively audio chat app Clubhouse.
Musk has also tweeted several times about Dogecoin, a meme-inspired character that started out as a joke. His tweets have worried some investors who fear that people will lose significant amounts of cash through speculative trading.
“It’s great that we can introduce new financial products, etc.,” said Siemiatkowski. “But they have to follow the standard rules that we have put in place and someone has to monitor this to make sure they are followed, otherwise a lot of consumers will lose a lot of money. And unfortunately it is.” Event.”
Siemiatkowski’s company was faced with demands for regulation. The UK government announced plans to step up BNPL (“buy now, pay later”) services, which allow shoppers to spread their purchases over a period of interest-free installments. Klarna, a regulated bank based in Sweden, is one of the largest providers in this area. Others are Afterpay in Australia and Affirm in the US.
BNPL plans are touted as an alternative to credit cards. But consumer protection groups like which? often warn them to mislead people – especially young people – into spending more than they can afford.
Klarna, which has so far raised a total of 2.1 billion US dollars in funding and was most recently privately valued at 10.6 billion US dollars, welcomed the move towards regulation. However, Siemiatkowski warned authorities not to put in place “regulations” that could harm innovation.
“If you want to regulate ‘buy now, pay later’, don’t tell us exactly how to do the underwriting,” he said on Wednesday. “Tell us what the maximum losses are, or how you would like our losses to compare to credit cards and other products on the market, then let innovation drive innovation so we can have great experiences.”
Klarna is close to signing a new fundraising contract with a potential stock market debut, sources familiar with the matter told CNBC. The sources preferred to remain anonymous as the details have not yet been made public. According to a Bloomberg report, the round could value the company at $ 31 billion. Klarna declined to comment when contacted by CNBC.