EU consumer group targets crypto ads on social media.
BEUC, an umbrella group of European consumer organizations, filed a complaint with European Union consumer protection bodies calling for Instagram, YouTube, TikTok, and Twitter to toughen their rules on advertising cryptocurrency.
The complaint stated that national regulators should require social media networks to strengthen their policies and prohibit influencers from promoting cryptocurrency.
“Ads and influencers on social media are increasingly promising consumers ‘get rich quick’ investments,” said Director General Monique Goyens in a statement. “Unfortunately, in most cases, these claims are too good to be true, and consumers are at high risk of losing a lot of money without recourse to justice.”
Under the forthcoming European Union regulation, Markets in Crypto Assets (MiCA), crypto providers will need a license to advertise across the bloc. Additionally, the Digital Services Act imposes further restrictions on large online platforms.
BEUC stated that extra measures are necessary under existing consumer laws banning unfair commercial practices, as cryptocurrency scams could cause significant financial losses.
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“Crypto promotion is all over the place, you see it on primetime TV,” Goyens told reporters, adding that she was “not a fan any more of Matt Damon” and was “boycotting” soccer star Cristiano Ronaldo, stars of recent promotions linked to crypto.com and Binance.
“Online platforms have a duty and an obligation of professional diligence” under EU rules to counter unfair commerce, Goyens added, saying that some networks are breaching their own ad policies.
National consumer authorities can theoretically levy fines on those who violate consumer law, although Goyens said she wanted sanctions to be tougher. TikTok, for example, promised to comply with EU strictures after BEUC complained of hidden marketing and aggressive ads targeting children.
Social media networks take different approaches to moderating content, according to BEUC staffer Agustín Reyna, but he anticipated that if they were unable to prevent interactions with misleading material, they should prohibit all cryptocurrency promotions altogether.
Recently, France passed landmark legislation regulating influencers – social media users who use their influence to promote products and services. Under the law, cryptocurrency promotions will only be allowed for registered cryptocurrency firms.
CoinDesk has contacted Twitter, Instagram, TikTok, and YouTube for comment.
UPDATE (June 8, 10:16 UTC): Adds press conference quotes from Goyens, Reyna starting in sixth paragraph, detail of earlier TikTok case.
Edited by Sheldon Reback.