UK financial and advertising regulators, the Financial Conduct Authority (FCA) and the Advertising Standards Authority (ASA), have joined forces to warn social media influencers against promoting services or products highlighting an approach “get rich quick”. They pointed out that those who do not comply could face legal consequences. Regulators released a seven-point checklist on April 6 to help influencers stay within the bounds of the law when discussing cryptocurrencies and non-fungible tokens (NFTs).
The checklist encourages influencers to assess whether they can promote a financial product and warns that followers could “lose all their money” on an investment. He also advises to avoid giving the impression that investing in crypto is an easy decision or to create a sense of urgency or FOMO among their audience. In addition to performing due diligence, influencers should seek FCA approval and ensure their ads comply with ASA guidelines.
Sarah Pritchard, Executive Director of FCA, pointed out a recent increase in illegal financial promotions. She pointed out that influencers often participate in such promotions without understanding the rules or the potential harm they could cause their communities. To highlight the risks associated with these marketing strategies, the FCA and ASA have teamed up with former Love Island UK contestant Sharon Gaffka. FCA will also host an “open roundtable” with influencer agents in the coming months.
During this time, France is getting closer to banning paid promotions associated with cryptos. The National Assembly approved an amendment proposal on March 23. If passed, the new law will add the cryptocurrencies to a list of restricted products, such as gambling and pharmaceuticals, which influencers cannot promote. Influencers who do not respect this rule could be liable to a two-year prison sentence and a fine of 30,000 euros.
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