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The financial and advertising regulators of the United Kingdom have joined forces to issue a warning to social media “finfluencers,” instructing them to cease promoting illegal “get rich quick” schemes or face enforcement action.
In a statement released on April 6, the Financial Conduct Authority (FCA) and the Advertising Standards Authority (ASA) referenced cryptocurrencies and non-fungible tokens (NFTs), outlining a seven-part checklist to help finfluencers remain compliant with the law.
The checklist prompts finfluencers to evaluate whether they are the “right person” to promote a specific financial product and reminds them that followers could “lose all their money” from the investment. It also advises:
“Don’t suggest to your followers that cryptoassets would be an easy investment decision or create any sense of urgency or FOMO.”
A seven-part checklist aims to provide “finfluencers” with more clarity over what may constitute an illegal financial promotion. Source: FCA
In addition to conducting “due diligence,” social media influencers should seek approval from the FCA and ensure that advertisements are legal, truthful, and properly labeled in accordance with ASA rules.
The FCA and ASA strongly advised influencers to check ScamSmart to verify they are not promoting an investment scam. “If in doubt, don’t promote,” reads the checklist’s slogan.
Unlawfully promoting financial products or services is a criminal offense punishable by a maximum sentence of two years’ imprisonment and an unlimited fine:
“If your post breaks the rules, the ASA will take action.”
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Sarah Pritchard, the FCA’s executive director, noted a recent surge in illegal financial promotions.
“They are often doing this without knowledge of the rules and without understanding of the harm they could cause their followers,” she added.
To highlight the risks associated with lucrative marketing schemes, the FCA and ASA partnered with former UK Love Island contestant Sharon Gaffka.
The FCA will also host an “open roundtable discussion” with influencer agents and the Influencer Marketing Trade Body in the coming months.
Related: Celebs who got burned endorsing crypto and those that got away with it
Across the channel, France is moving closer to banning French social media influencers from promoting cryptocurrencies and NFTs from unlicensed firms. This follows the National Assembly’s economic committee voting 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.
Violators of the incoming law could face two years’ imprisonment and a fine of 30,000 Euros ($32,300).
Reality TV star Kim Kardashian, boxing legend Floyd Mayweather, and internet celebrity Jake Paul are among the most notable figures embroiled in allegations of promoting crypto investment schemes.
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