Britain's financial and advertising regulators have teamed up to issue a warning to social media "financial influencers", telling them to stop promoting illegal "get-rich-quick" schemes or face law enforcement.
Cryptocurrencies and non-fungible tokens were mentioned by the Financial Conduct Authority (FCA) and the Advertising Standards Authority (ACA) in an April 6 statement laying out a seven-part list to ensure financial Influencers obey the law.
The list asks financial influencers to consider whether they are the "right people" to promote financial products, noting that their followers could "lose all their money" from investing. It also states: “Don’t imply to your followers that crypto assets will be an easy investment decision or create any sense of urgency or FOMO.”
In addition to conducting “due diligence,” social media influencers should seek FCA approval and ensure that the advertisements are legal, factual, and properly labeled as such under the ASA rules. The FCA and ACA strongly recommend that influencers check ScamSmart to ensure they are not promoting investment scams. "When in doubt, don't promote," reads the list's tagline. Illegal marketing of financial products or services is an offense punishable by up to two years in prison and an unlimited fine: Sarah Pritchard, executive director of the FCA, explained that there has been a recent surge in illegal financial promotions.
"They often do so without understanding the rules or the harm they may be doing to their followers," she added. The FCA and ASA have teamed up with former UK Love Island contestant Sharon Gaffka to highlight the risks posed by lucrative marketing schemes.
The FCA will also host 'open roundtable discussions' with influencer agencies and influencer marketing trade bodies in the coming months. Across the Channel, France is moving closer to banning French social media influencers from promoting cryptocurrencies and NFTs from unlicensed companies after the National Assembly’s economic committee voted in favor of an amendment on March 23.
If passed, the new law would add crypto assets to a list of prohibited products, such as gambling and pharmaceuticals, that cannot be promoted by influencers.
Those found breaking the upcoming law could also be sentenced to two years in prison and fined 30,000 euros ($32,300). Reality TV star Kim Kardashian, boxing legend Floyd Mayweather and internet personality Jake Paul are some of the most prominent figures to have found themselves embroiled in allegedly promoting crypto investment schemes.
