According to the UK’s Financial Conduct Authority (FCA), which gained oversight over cryptocurrency promotions under the Financial Services and Markets Act enacted at the end of June, social media influencers, even if unpaid, fall within the scope of the UK’s financial advertising rules and could be in violation of the law without proper approval.
If influencers post online in hopes of getting a job later on from a company, or in order to increase the number of views of their own posts, they fall within the scope of the promotion regulation, just like influencers who do get paid, the FCA said in a consultation on social media advertising regulation for the financial industry on July 17.
The FCA said that when an influencer sends a financial promotion without the approval of an authorized person, they are likely to be “sending an illegal financial promotion.” Influencers falling within the scope of the rule will have to make sure their promotions are fair and not misleading, he said.
Even before the FCA got involved, cryptocurrency promotions on social media were under scrutiny. Last year, sisters Jessica and Eve Gale, former cast members of the British reality show Love Island, were ordered by the Advertising Standards Authority (ASA), the advertising industry’s self-regulatory body, to stop misleading Instagram followers with their crypto-promoting posts.
The FCA released promotion rules for the crypto space in June, banning the promotion of products using financial incentives like airdrops and requiring crypto companies to provide clear risk warnings in their ads. When the new financial promotion regime comes into effect in October, registered crypto businesses will be able to approve their ads to influencers for a limited time.
｜Translation: CoinDesk JAPAN
｜Editing: Toshihiko Inoue
｜Original: Even Unpaid Social Media Crypto Promotions May Breach UK Ad Rules: Financial Regulator