UK watchdog says crypto memes can be considered financial propaganda

Crypto firms and influencers may be required to introduce disclaimers on crypto memes to comply with advertising laws in the United Kingdom, according to a new proposed guidance from the country’s financial regulator.

On 17 July, the Financial Conduct Authority (FCA) Free A proposed guidance on social media financial promotion targeting promotional memes and financial influencers – “fininfluencers”.

Too many people across the UK are being given financial promotions from inappropriate sources.

We will intensify our work to crack down on illegal financial promotions, especially those found on social media. #financialpromotion #financial Services https://t.co/sK8r5ExxVm

– Financial Conduct Authority (@TheFCA) 17 July 2023

The FCA said it has seen memes of crypto companies circulating online that many people are not aware are subject to its propaganda rules.

It states that promotional memes are especially prevalent in the crypto sphere and any form of communication can be considered financial promotion.

The FCA considers crypto to be a high-risk investment. It may be advertised largely for retail investors but includes requirements such as risk warnings and restrictions on investment incentives.

It said that in the fourth quarter of 2022, 69% of financial promotions on websites or social media from authorized firms were modified or withdrawn following FCA intervention.

It launched a consultation from 2015 to update its guidance and clarify its expectations for marketers on how to apply its rules around promotion.

Fininfluencer in the crosshairs

The FCA said it has seen an increase in the number of finance-oriented influencers promoting financial products they have little knowledge of, typically targeting a younger audience.

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It warned influencers that their promotion could be punished with a jail term of up to two years, an unlimited fine, or both. This law also applies to promotions from outside the UK that may have ramifications in the country.

In its argument for the reminder, it cited reports It was claimed that more than 60% of 18 to 29-year-olds follow social media influencers, while three-quarters say they trust their advice.

a 2021 fca survey found that 58% of respondents under the age of 40 cited social media and news hype as reasons for their investment in what the watchdog considers a high-risk product.

Public comments on the proposed guidance are open through September 11.

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