- The FCA has warned crypto influencers of potential legal violations as part of its broader crackdown on misleading crypto marketing
- New guidance emphasizes the legal risks faced by influencers and the firms they represent
- Crypto influencers risk legal consequences if they violate FCA rules, as outlined in the agency’s latest guidance on financial promotions
The UK’s financial watchdog, the Financial Conduct Authority (FCA), has warned crypto influencers that they may be breaking the law. The FCA has clamped down on crypto marketing in all its forms in recent years, and this new guidance coming as part of this campaign to protect investors from scams. In its latest guidance, Finalised Guidance on Financial Promotions on Social Media, the FCA has warned that crypto influencers could be in legal peril if they contravene the rules, as could any firms they represent.
More Guidelines for Crypto Firms
The FCA’s new guidance pulls no punches, warning that unregistered influencers who promote cryptocurrencies or crypto platforms could be “committing a criminal offence.” According to the new guidelines, each financial promotion must stand alone in compliance with FCA rules, providing a balanced view of benefits and risks.
Whether it’s a meme, reel or TikTok, firms are responsible for all their promotions, even if they’re working with influencers. Read more about our new finalised guidance on financial promotions on social media: https://t.co/N6ipxZ34Rp #FinancialPromotions #FinancialServices pic.twitter.com/vjfn2evrHP
— Financial Conduct Authority (@TheFCA) March 26, 2024
Firms are urged to consider various factors, including target audience and recipient needs, to facilitate well-informed decision-making by consumers.
Specific information requirements, such as risk warnings, are highlighted, with emphasis on their prominent display, especially in promotions for high-risk investments.
Influencers Need to be Careful
Most notable, however, is the warning for social media influencers, both those working for companies or shilling their favorite coin:
Unauthorised persons, such as influencers, who promote financial products or services that are subject to regulation without the approval of an FCA authorised person may be committing a criminal offence.
Even in the absence of a commercial relationship, influencers’ social media communications about financial products may still fall under financial promotion restrictions, necessitating approval before publication.
Several UK firms have already fallen foul of the UK’s stricter rules on crypto marketing and have been forced to pull their ads as a result.
