In an effort to combat an increase in frauds, the financial services regulator in Britain released recommendations for financial services firms and social media influencers creating memes about cryptocurrencies and other assets.

In a statement released on Tuesday, the Financial Conduct Authority stated that all financial product marketing, including memes, should be truthful, transparent, and fair.

The watchdog stated that before releasing advertisements and memes regarding financial products and services, financial social media influencers, or “finfluencers,” must obtain the consent of an FCA-appointed representative.

“Promotions aren’t just about the likes, they’re about the law. We will take action against those touting financial products illegally,” Lucy Castledine, director of consumer investments at the FCA, said in a statement.

“Social media will not always be the best place to promote complex products. Firms need to consider whether a platform that offers limited characters or space is the right place to do so.”

According to the FCA, more than 10,000 deceptive advertisements regarding financial services were removed in 2022.

According to the regulator, the cryptocurrency industry is one where memes are most frequently used in promotional campaigns.

Particularly on Telegram, a well-liked medium among fans of virtual currencies, crypto memes are common. Another platform where cryptocurrency is talked about a lot is Reddit.

According to the FCA, it has observed advertisements on chat rooms like Reddit and Telegram that use memes to hype up specific assets.

The FCA stated that users of chat rooms and forums should be aware that financial promotions on those platforms will still be governed by its regulations.

This action is a component of the FCA’s attempt to combat the surge in financial fraud. During the Covid-19 pandemic, scams increased dramatically as more people resorted to online platforms for their banking and investing needs.

The FCA has stepped up its cryptocurrency advertising game. The FCA began requiring companies that want to advertise consumer cryptocurrency investing in the UK to register or be authorised by the regulator, or to have an authorised company approve their marketing, in October 2023.

(Adapted from CNBC.com)

Categories: Economy & Finance, Regulations & Legal, Strategy