The Financial Conduct Authority (FCA), Britain’s financial services regulator, has announced guidelines for financial companies and social media influencers who create memes about cryptocurrencies and other investments. The aim is to address the increasing number of scams in the market.
According to the FCA, all marketing for financial products, including memes, should be fair, clear, and not misleading. This applies to both traditional forms of advertising as well as social media posts.
The use of memes in promoting financial products has become particularly prevalent in the cryptocurrency industry. The FCA has observed a significant number of misleading advertisements on platforms such as Reddit and Telegram.
In order to promote financial products on social media, influencers must have the approval of an FCA-appointed representative. This is to ensure that all promotions comply with the FCA’s rules and regulations.
Lucy Castledine, director of consumer investments at the FCA, stated that promotions should not only focus on gaining likes, but also comply with the law. She also emphasized the need for firms to carefully consider whether a platform with limited space, such as social media, is the appropriate place to promote complex financial products.
The FCA has been actively cracking down on financial scams and misleading advertisements. In 2022, they took down over 10,000 misleading adverts related to financial services.
It is important for consumers to be aware that financial promotions on chatrooms and forums, such as Reddit and Telegram, are also subject to the FCA’s rules and regulations.
The FCA’s efforts to regulate the advertising of financial products, especially in the crypto industry, is part of their larger plan to address the increase in financial scams during the Covid-19 pandemic. In October 2023, the FCA made it mandatory for firms promoting consumer crypto investing in the UK to be authorized or registered with the regulator, or have their marketing approved by an authorized firm.
