UK FCA cracks down on crypto and meme coins promotion

The FCA specifically warned influencers regarding the legal consequences of endorsing financial products without authorization

The UK Financial Conduct Authority (FCA) has recently cautioned firms and influencers against disseminating misleading information, especially regarding popular meme coins and crypto assets.

The FCA emphasized the importance of all advice being clear, fair, and free from any misleading claims. In light of the pervasive use of social media platforms for marketing, the regulator reminded firms of their responsibility to ensure that promotional content complies with legal standards. This includes providing balanced information with appropriate risk warnings to enable consumers to make informed financial decisions.

In particular, the FCA highlighted the risks associated with promoting financial products without proper authorization, cautioning that such actions could lead to criminal prosecution.

Influencers, often referred to as “finfluencers,” were specifically warned about the potential legal consequences of endorsing financial products without the necessary approvals.

The guidance also addressed the widespread use of memes in promoting crypto assets, noting that even seemingly casual communications, such as memes, could be subject to financial promotion restrictions.

The FCA urged users of social media platforms and online forums to exercise caution when encountering financial promotions, emphasizing the need for clear disclosure of any financial interests involved.

Moreover, the FCA emphasized the limitations of social media platforms for promoting complex financial products, urging firms to consider the suitability of such channels for their advertising strategies. Scrutiny of financial promotions has intensified, with the FCA reporting an increase in the removal of misleading adverts in recent years.

Lucy Castledine, director of consumer investments at the FCA, reiterated the importance of adherence to legal standards in financial promotions. Castledine emphasized that promotions must comply with the law to ensure consumer confidence in investment, savings, and borrowing decisions.

The FCA's efforts to collaborate with industry stakeholders and educate consumers aim to raise awareness of the risks associated with promoting financial products on social media platforms.

In September last year, the FCA issued a final warning to cryptocurrency businesses, emphasizing the need to comply with new financial promotion rules. Despite the regulations, the majority of firms have reportedly ignored the rules, prompting concerns from the FCA about poor engagement.

The FCA stated that unauthorized crypto businesses must stop making illegal financial promotions to UK consumers, with potential penalties including imprisonment or fines.

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Written by Silvia Pavlof

Silvia has explored various forms of writing, ranging from content creation for social media to crafting movie scripts. Drawing on her experience as a journalist specializing in the gambling sector, she is currently investigating the impact of cryptocurrencies and blockchain on traditional gambling and iGaming.

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