United Kingdom regulators are upping the ante in cracking down on the use of celebrities to promote illegal cryptocurrency investment platforms, with the latest move being a partnership with Love Island cast member Sharon Gaffka.
Both the Financial Conduct Authority (FCA) and the Advertising Standards Authority (ASA) announced that they will increase engagement with influencers to reduce incidences of illegal financial promotion. The regulatory watchdogs confirm that a roundtable discussion between the agencies and the Influencer Marketing Trade Body is underway to achieve its aims.
A seven-part checklist is also released to guide influencers in considering making a digital currency promotion. The checklist warns influencers against telling followers that digital assets are an “easy investment decision” while urging them to desist from creating a sense of urgency with their promotion.
“You could be on the wrong side of the law if you promote without cluing yourself up first,” read the checklist. “Making an unlawful financial promotion is a criminal offense that carries a maximum sentence of 2 years imprisonment and an unlimited fine.”
Other provisions of the checklist include a double-check by the influencers that the firms they are promoting are legitimate and that proper labels should be put in place to inform followers if a post is an advertisement. Influencers are also advised to make proper disclosures that digital assets are unregulated, subject to tax, and that the value of the investment could be wiped off.
“This campaign with the FCA and ASA will hopefully make sure other influencers stay on the right side of the law and prevent them from unknowingly introducing their followers to scams or high-risk investments,” said Gaffka.
The ASA has been rampaging against digital currency advertisements violating its rules. Last year, the advertising watchdog flagged down promotions from Floki, Arsenal, Crypto.com, Coinbase (NASDAQ: COIN), and eToro, among others.
Influencers on the wrong side of the law
Celebrities have stoked the ire of regulators following promotional activities for digital currency platforms in recent weeks. Across the Atlantic, U.S. investors have dragged Kim Kardashian and boxing star Floyd Mayweather for allegedly promoting a fraudulent digital currency investment scheme.
In France, a new law could be passed banning celebrities from promoting digital assets and non-fungible tokens (NFTs) from unlicensed firms. Celebrities in breach of the proposed law will be slammed with a $32,000 fine and a term of imprisonment of up to two years.
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