The UK’s financial services regulator has issued instructions to financial services companies and social media influencers who create memes about cryptocurrencies and other investments to regulate them amid growing fraud in this area.
The Financial Conduct Authority has stated that any marketing of financial products, including those presented in memes, must be honest, clear and not misleading. The regulator noted that persons who influence financial social networks, or «financial influencers», must obtain the approval of a designated FCA representative before publishing advertisements and memes about financial products and services, the FCA reports.
«Promotion — is not just about likes, it’s about the law. We will take action against those who unlawfully promote financial products»,” said Lucy Castledine, director of consumer investment at the FCA.
In 2022, the authority removed more than 10,000 misleading financial services ads. The regulator stated that the use of memes in promotions is particularly common in the cryptocurrency industry. In turn, crypto memes are especially common on Telegram, a popular platform among digital currency enthusiasts. Reddit is another place where cryptocurrencies are widely discussed.
The FCA said it has observed promotions using memes to hype certain investments in chat rooms such as Reddit and Telegram. Users of chat rooms and forums should be aware that financial promotions on these channels are still subject to FCA rules.
The move is part of the FCA’s attempt to clamp down on the rise of financial fraud, which saw a significant increase during the Covid-19 pandemic. More consumers then turned to online platforms for their banking and investment needs. In October 2023, the FCA began requiring that firms wishing to promote consumer crypto investing in the UK be authorized or registered with the regulator, or that their marketing be endorsed by an authorized firm.
Source: CNBC