BEUC claims major social media platforms are “responsible for allowing misleading advertisements of crypto.”
In the spotlight of the European Consumer Organisation (BEUC) are popular social media platforms accused of playing a significant role in promoting potentially misleading cryptocurrency content.
The BEUC published a report on June 8th, titled “Hype or harm? The Great Social Media Crypto Con,” highlighting the lack of consumer awareness about the potential risks linked to crypto investment.
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The report names YouTube, Instagram, Twitter, and TikTok as actors central to this issue. Facebook also falls under criticism as crypto advertisers reportedly found ways to bypass regulations prohibiting the promotion of unlicensed financial platforms. The report explicitly states:
TikTok, Instagram, Twitter & YouTube are responsible for allowing misleading advertisements of crypto to multiply through ads & influencers. This is an unfair commercial practice, exposing consumers to serious harm (loss of significant amounts of money).
Twitter earns a special mention in the report due to Elon Musk’s famous change of Twitter’s logo to the Doge mascot, a symbol for Dogecoin (DOGE), despite the platform’s ban on crypto advertising.
The report also highlighted the rise of financial influencers, or “finfluencers,” who are gaining a younger audience and thus further increasing crypto promotion.
Current efforts to tackle misleading promotions by national regulators, the report suggests, are fragmented and require a broader, more comprehensive approach.
There is existing legislation to combat this on a European Union level—the Unfair Commercial Practices Directive—and the report calls for its deployment under the guidance of the Consumer Protection Cooperation Network (CPCN).
The problem continues to be addressed at the national level mainly 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.
To remedy this, the BEUC urged the CPCN to mandate that social platforms impose stricter advertising policies. These proposed guidelines would prohibit influencers from promoting cryptocurrency products and require the social media giants to report on the effectiveness of these measures to the European Commission.
In a contrasting move, the French Senate recently passed an amendment allowing cryptocurrency companies registered in the country to employ social media influencers for promotional and advertising activities.