The Financial Conduct Authority in Britain recently announced new guidelines for financial services companies and social media influencers regarding the promotion of cryptocurrencies and other investments through memes. The regulator emphasized the importance of all marketing materials, including memes, being fair, clear, and non-misleading in order to protect consumers from potential scams.
The FCA stated that social media influencers in the financial sector, often referred to as “finfluencers,” must obtain approval from an FCA-appointed representative before posting any advertisements or memes related to financial products and services. This additional step aims to ensure that all promotional content complies with the regulatory standards set forth by the FCA.
In 2022, the FCA removed over 10,000 misleading advertisements about financial services, highlighting the prevalence of deceptive marketing practices within the industry. The regulator specifically called out the use of memes in promotions, noting that cryptocurrency memes, in particular, have become a popular tool for hyping up investments on platforms like Telegram and Reddit.
The FCA emphasized that despite the informal nature of chatrooms and forums, financial promotions on these platforms are still subject to regulatory scrutiny. The regulator’s crackdown on misleading advertisements and scams is part of its broader effort to protect consumers from fraudulent schemes, especially in light of the increased online activity during the Covid-19 pandemic.
With the growing popularity of cryptocurrencies, the FCA has become more vigilant in monitoring and regulating crypto advertising. Starting in October 2023, the regulator mandated that firms looking to promote consumer crypto investing in the UK must be authorized or registered with the FCA, or have their marketing materials approved by an authorized firm. This strict requirement is intended to safeguard investors and minimize the risk of financial scams in the crypto industry.
The FCA’s guidelines for financial services companies and social media influencers represent a significant step towards ensuring transparency and accountability in the promotion of financial products and services, particularly within the cryptocurrency sector. By setting clear standards and enforcing regulatory rules, the FCA aims to protect consumers and maintain the integrity of the financial industry amidst the growing prevalence of online advertising and social media marketing practices.