EU targets crypto ads on social media.
On June 8, the European Consumer Organisation (BEUC), which is a group that represents 46 consumer organizations from 32 countries, published a report entitled “Hype or harm? The Great Social Media Crypto Con.” The 20-page report argues that consumers are not fully aware of the risks associated with cryptocurrency.
Today, BEUC and consumer groups from eight countries are taking action against social media platforms TikTok, Instagram, Twitter, and YouTube for allowing misleading promotion of cryptocurrency assets on their platforms. A complaint has been filed with the EU Commission and consumer authorities: https://t.co/b6NYsBl4VM pic.twitter.com/w5iLMy4h1i
— The Consumer Voice (@beuc) June 8, 2023
The report provides examples of misleading promotion of cryptocurrency on Instagram, YouTube, Twitter, and TikTok, calling them “key players” in crypto advertising. The report also notes that Facebook allows crypto advertisements to bypass rules that forbid the promotion of non-licensed financial platforms. The announcement states:
“TikTok, Instagram, Twitter, and YouTube are responsible for allowing misleading advertisements of crypto to multiply through ads and influencers. This is an unfair commercial practice that exposes consumers to serious harm (loss of significant amounts of money).”
Regarding Twitter, the report mentions Elon Musk’s use of Doge, a mascot for Dogecoin (DOGE), despite the platform’s own ban on crypto ads. The report also refers to “finfluencers” as “an important source of information” for a younger audience.
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Despite the efforts of national regulators to combat misleading promotion, the problem still lacks a comprehensive approach. According to the report, a legal foundation already exists to take measures at the European Union level, namely the Unfair Commercial Practices Directive, and a body to lead enforcement called the Consumer Protection Cooperation Network (CPCN).
“The problem continues to be addressed mainly at the national level, while it would require a common approach by the CPC Network acting collectively on the basis of the UCPD and targeting the platforms used for the promotion of crypto assets and related services.”
Meanwhile, in France, the Senate has approved an amendment allowing registered crypto companies to hire social media influencers for advertising and promotional purposes.
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