The United Kingdom’s financial watchdog has warned financial influencers against promoting financial products without its approval, including ‘crypto’ memes on social media.
The new guidance by the Financial Conduct Authority (FCA) addressed advertising
through memes, reels, or gaming streams. Such ads must be transparent and fair and not mislead the target audience. This requires a risk warning outlining what the audience can lose by investing in the products.
“Any marketing for financial products must be fair, clear, and not misleading so consumers can invest, save, or borrow with confidence. Promotions aren’t just about the likes; they’re about the law. We will take action against those touting financial products illegally,” commented the FCA’s director of consumer investments, Lucy Castledine.
Companies whose products are advertised must also ensure the influencers communicate the products correctly or be held liable.
In the ‘crypto’ realm, the watchdog singled out Reddit (NASDAQ: RDDT) and Telegram, stating that many influencers use memes to trivialize the investment and appeal to novices.
“Users of chatrooms or forums should be aware that financial promotions on these channels will still be subject to the financial promotion restriction,” the warning stated.
It added that FCA’s crackdown will extend to both public and invitation-only platforms.
Memes have become a significant part of the digital asset world, with memecoins accounting for a combined $70.6 billion in market cap, according to CoinGecko.
Memecoins are known for their volatility, with some hitting a billion-dollar valuation days after launching. However, these coins shed their gains just as fast, leaving thousands of disgruntled investors.
The FCA’s crackdown aligns with the U.K.’s continued strict oversight of the digital asset sector. This approach saw major players like Bybit and Luno exit the U.K. market last year, while others like Revolut and PayPal (NASDAQ: PYPL) suspended some of their services in the U.K.
The FCA has been at the forefront of the renewed crackdown; in 2023, it took down over 10,000 misleading ‘crypto’ ads.
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