The British financial services regulator has released recommendations for financial services companies and social media influencers who create memes about cryptocurrency and other assets. This aims to combat an upsurge in fraud, according to CBNC.
TakeAway Points:
- The Financial Conduct Authority stated that all financial product marketing, including memes, should be truthful, transparent, and fair.
- The watchdog said financial influencers, or “finfluencers,” must have the approval of an FCA-appointed representative to be able to make advertisements and memes about financial products.
- According to the regulator, memes are frequently shared on websites like Reddit and Telegram and are especially common in the cryptocurrency industry.
Recommendations for Financial Companies
The Financial Conduct Authority stated in a statement on Tuesday that all financial product marketing, including memes, had to be truthful, transparent, and fair.
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When releasing advertising and memes about financial products and services, financial social media influencers, or “finfluencers,” are required by the FCA to obtain the consent of a representative designated by the FCA.
“Promotions aren’t just about the likes, they’re about the law. We will take action against those touting financial products illegally,”
Lucy Castledine, director of consumer investments at the FCA, said in a statement.
Castledine added that “Social media will not always be the best place to promote complex products. Firms need to consider whether a platform that offers limited characters or space is the right place to do so.”
The FCA said that, in 2022, it took down over 10,000 misleading advertisements about financial services.
Crypto Memes
According to the regulator, the cryptocurrency industry is one where memes are most frequently used in promotional campaigns.
Particularly on Telegram, a well-liked medium among fans of virtual currencies, crypto memes are common. Another platform where cryptocurrency is talked about a lot is Reddit.
According to the FCA, it has observed advertisements on chat rooms like Reddit and Telegram that use memes to hype up specific assets.
The FCA stated that users of chat rooms and forums should be aware that financial promotions on those platforms will still be governed by its regulations.
Fight Against Financial Fraud
This action is a component of the FCA’s attempt to combat the surge in financial fraud. During the Covid-19 pandemic, scams increased dramatically as more people resorted to online platforms for their banking and investing needs.
The FCA has stepped up its cryptocurrency advertising game. The FCA began requiring companies that want to advertise consumer cryptocurrency investing in the UK to register or be authorised by the regulator, or to have an authorised company approve their marketing, in October 2023.
