Thursday, 20 June 2024

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UK uses Love Island star to warn finfluencers on crypto and investment schemes

UK uses Love Island star to warn finfluencers on crypto and investment schemes

The financial and advertising regulators of the United Kingdom have teamed up to send a warning to social media “finfluencers” telling them to stop promoting illegal “get rich quick” schemes or face law enforcement.

The Financial Conduct Authority (FCA) and the Advertising Standards Authority (ACA) made reference to cryptocurrencies and nonfungible tokens (NFTs) in its April 6 statement in its seven-part checklist to ensure finfluencers stay within the bounds of the law.

The checklist asks finfluencers to consider whether they’re the “right person” to be promoting the financial product and states that their followers may “lose all their money” from the investment. It also states:

“Don’t suggest to your followers that cryptoassets would be an easy investment decision or create any sense of urgency or FOMO.”

A seven-part checklist aims to provide “finfluencers” with more clarity over what may constitute an illegal financial promotion. Source: FCA

In addition to conducting “due diligence,” social media influences should seek approval of the FCA and ensure that the advertisement is legal, truthful and properly labeled as an advertisement under ASA rules.

The FCA and ACA strongly suggest influencers to also check ScamSmart to ensure that they’re not promoting an investment scam. “If in doubt, don’t promote”, the checklist’s slogan states.

It is a crime to unlawfully promote financial products or services which carries a maximum sentence of two years’ imprisonment and an unlimited fine:

“If your post breaks the rules, the ASA will take action.”

Sarah Pritchard, the FCA’s executive director explained that there has been a spike in illegal financial promotions of late.

“They are often doing this without knowledge of the rules and without understanding of the harm they could cause their followers,” she added.

The FCA and ASA partnered with former U.K. Love Island contestant Sharon Gaffka to emphasize the risks that come with lucrative marketing schemes.

The FCA will also host an “open roundtable discussion” with influencer agents and the Influencer Marketing Trade Body in the coming months.

Related: Celebs who got burned endorsing crypto and those that got away with it

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