The Financial Conduct Authority in Britain has issued new guidelines for financial services companies and social media influencers creating memes about cryptocurrencies and other investments to combat a rise in scams. The FCA emphasized that all marketing for financial products, including memes, must be fair, clear, and not misleading. Social media influencers, also known as “finfluencers,” must obtain approval from an FCA-appointed representative before posting advertisements and memes related to financial products and services.
Lucy Castledine, the director of consumer investments at the FCA, warned that promotions must comply with the law, emphasizing that the focus should not just be on receiving likes. The FCA advised firms to carefully consider whether social media platforms, with limited characters or space, are appropriate for promoting complex financial products. The regulator highlighted that in 2022, it removed over 10,000 misleading advertisements about financial services.
The FCA specifically mentioned the prevalence of memes in promotions within the cryptocurrency industry, with platforms like Telegram and Reddit being popular channels for discussing crypto investments. Promotions using memes to hype up investments have been seen on chatrooms like Reddit and Telegram. The FCA reminded users of these platforms that financial promotions must still adhere to its rules, even on social media and forums.
This move to regulate financial promotions on social media is part of the FCA’s efforts to address the surge in financial scams, which escalated during the Covid-19 pandemic as more consumers shifted to online platforms for banking and investment purposes. The FCA has been particularly focused on cracking down on crypto advertising, implementing requirements for firms promoting consumer crypto investing in the UK to be authorized, registered, or have their marketing approved by an authorized firm since October 2023.
Overall, the FCA’s guidelines aim to protect consumers from misleading or fraudulent financial promotions on social media platforms, particularly in the realm of cryptocurrencies. By requiring transparency and approval for marketing materials, the regulator seeks to ensure that individuals are not misled by promotions that could lead to financial loss. As scams continue to evolve and proliferate online, the FCA remains vigilant in its efforts to safeguard the public from financial exploitation.
