UK restricts memes about crypto, other investments to combat scams

UK restricts memes about crypto, other investments to combat scams

Wenjin Chen | Digital vision vectors | Getty Images

Britain’s financial services regulator has announced guidelines for financial services firms and social media influencers to create memes about cryptocurrencies and other investments in a bid to combat the rise in scams.

The Financial Conduct Authority said in a statement on Tuesday that all marketing of financial products – including those reflected in memes – should be fair, clear and not misleading.

The regulator said financial social media influencers, or “finfluencers,” must obtain approval from an FCA-appointed representative before posting advertisements and memes about financial products and services, the FCA said.

“Promotions aren’t just about likes, they’re about the law. We will take action against those who advertise financial products illegally,” said Lucy Castledine, director of consumer investment at the FCA, in a statement on Tuesday.

“Social media will not always be the best place to promote complex products. Companies need to consider whether a platform that offers limited characters or space is the right place for this.”

The FCA said it removed over 10,000 misleading advertisements about financial services in 2022.

Promotional crypto memes

The regulator said the use of memes in promotions is particularly common in the cryptocurrency industry.

Crypto memes are particularly common on Telegram, a popular platform for digital currency lovers. Reddit is another place where crypto is discussed in depth.

The FCA said it had seen meme-based promotions on chat rooms such as Reddit and Telegram to boost certain investments.

Users of chat rooms and forums should be aware that financial advertising on these channels remains subject to FCA rules, the FCA said.

The move is part of the FCA’s efforts to tackle the rise in financial fraud. During the Covid-19 pandemic, the number of scams increased sharply as more consumers turned to online platforms for their banking and investment needs.

The FCA has become particularly aggressive when it comes to crypto advertising. In October 2023, the FCA began requiring that companies wishing to promote cryptocurrency investment to consumers in the UK must be authorized or registered with the regulator, or have their marketing approved by an authorized firm.

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2024-03-27 10:39:22