The financial and advertising regulators posted a seven-part checklist to ensure these social media stars stay within the bounds of the law.
The financial and advertising regulators of the United Kingdom have teamed up to send a warning to social media “finfluencers” telling them to stop promoting illegal “get rich quick” schemes or face law enforcement.
The Financial Conduct Authority (FCA) and the Advertising Standards Authority (ACA) made reference to cryptocurrencies and nonfungible tokens in their April 6 statement, which laid out a seven-part checklist to ensure that finfluencers stay within the bounds of the law.
The checklist asks finfluencers to consider whether they’re the “right person” to be promoting the financial product and states that their followers may “lose all their money” from the investment. It also states:
“Don’t suggest to your followers that cryptoassets would be an easy investment decision or create any sense of urgency or FOMO.”
In addition to conducting “due diligence,” social media influences should seek approval of the FCA and ensure that the advertisement is legal, truthful and properly labeled as an advertisement under ASA rules.
The FCA and ACA strongly advised that influencers check ScamSmart to ensure that they’re not promoting an investment scam. “If in doubt, don’t promote”, the checklist’s slogan states.
It is a crime to unlawfully promote financial products or services which carries a maximum sentence of two years’ imprisonment and an unlimited fine:
“If your post breaks the rules, the ASA will take action.”
Sarah Pritchard, the FCA’s executive director, explained that there has been a spike in illegal financial promotions of late.
“They are often doing this without knowledge of the rules and without understanding of the harm they could cause their followers,” she added.
The FCA and ASA partnered with former U.K. Love Island contestant Sharon Gaffka to emphasize the risks that come with lucrative marketing schemes.
The FCA will also host an “open roundtable discussion” with influencer agents and the Influencer Marketing Trade Body in the coming months.
Across the channel, France is edging closer to banning French social media influencers from promoting cryptocurrencies and NFTs from unlicensed firms after the National Assembly’s economic committee voted in favor of an amendment proposal 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 to violate the incoming law may also be subject to two years’ imprisonment with a fine of 30,000 Euros ($32,300).
Reality TV star Kim Kardashian, boxing legend Floyd Mayweather and internet celebrity Jake Paul are some of the most notable figures to have found themselves embroiled in allegedly promoting crypto investment schemes.