Ahmed Ali The European Consumer Organization, BEUC, is pressuring Brussels to impose tighter regulations on crypto asset promotion across social media platforms. The consortium recommends strengthening advertising rules on significant platforms such as Twitter and Tiktok and inhibiting influencers from misleading potential investors.
BEUC Expresses Concern Over Risky Crypto Promotion to European Consumers on Social Media
Known by its French acronym, BEUC (Bureau Européen des Unions de Consommateurs), the European Consumer Organization has registered a complaint with the European Commission and EU consumer authorities against social media giants Tiktok, Twitter, Instagram, and Youtube, accusing them of encouraging deceptive crypto promotion.
In a statement accompanying its report titled “Hype or harm? The great social media crypto con”, the bureau blames these social media platforms for allowing the spread of deceptive crypto ads both through standard advertising channels and influencers. The bureau asserts that such conduct constitutes an unfair trade practice that places consumers at serious risk, potentially leading to substantial financial losses.
In operation since 1962, BEUC represents 45 consumer protection organizations from 32 countries within the European Union, European Economic Area (EEA), and applicant nations. The complaint was lodged in collaboration with nine of its members from Denmark, France, Greece, Italy, Lithuania, Portugal, Slovakia, and Spain.
In its report, the Bureau cites abundant evidence of deceptive crypto promotion on the aforementioned platforms, which is in direct violation of their advertising policies. The bureau also urges the Consumer Protection Cooperation Network, an entity comprising public authorities proficient in consumer protection, to demand certain amendments from these companies.
BEUC Urges European Authorities to Make Social Media Giants Safeguard Users Against Scams
The organization is adamant about the adoption and enforcement of more rigorous advertising guidelines by platforms endorsing crypto. It also insists on introducing preventative measures against influencers misleading consumers about the volatile and speculative nature of crypto assets.
“Consumers are frequently lured by ads and influencers on social media offering ‘get rich quick’ investment opportunities. Regrettably, these propositions are frequently too good to be true,” as stated by BEUC Director General Monique Goyens.
Goyens mentions the imminent regulation of the sector under the EU’s newly enacted Markets in Crypto Assets (MiCA) legislation. However, she points out that this law does not extend to social media companies “profiting from crypto advertising at the detriment of consumers,” and elaborates:
We are appealing to the relevant authorities to ensure Instagram, Youtube, Tiktok, and Twitter fulfil their obligation to safeguard consumers from crypto scams and misleading promises.
BEUC’s appeal aligns with the British Financial Conduct Authority’s (FCA) introduction of stricter advertising regulations for businesses promoting crypto assets to UK consumers this week. The FCA aims to ensure investors are adequately informed about the risks and has prohibited ‘refer a friend’ bonuses and introduced a cooling-off period for first-time crypto purchasers.
What’s your view on the potential stricter regulation on crypto promotion on social media by European consumer protection authorities? Share your thoughts in the comments section below.
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Frequently Asked Questions (FAQs) about Crypto Promotion Regulation
Q: What is BEUC advocating for in relation to crypto promotion on social media?
A: BEUC is advocating for tighter regulations on the promotion of crypto assets on social media platforms. They are urging for stricter advertising rules on platforms like Twitter and Tiktok and seeking measures to prevent influencers from misleading investors.
Q: What is the complaint filed by BEUC against social media platforms?
A: BEUC has filed a complaint with the European Commission and EU consumer authorities against Tiktok, Twitter, Instagram, and Youtube. They allege that these platforms facilitate misleading crypto promotion and allow deceptive advertisements and influencers to thrive.
Q: Why does BEUC consider crypto promotion on social media a concern?
A: BEUC believes that the promotion of crypto assets on social media platforms exposes consumers to significant financial harm. They argue that crypto investments are highly risky and not suitable for many consumers. BEUC aims to protect consumers from misleading information and potential financial losses.
Q: Who is involved in BEUC’s complaint against social media platforms?
A: BEUC’s complaint has been filed in collaboration with nine of its members from Denmark, France, Greece, Italy, Lithuania, Portugal, Slovakia, and Spain. These members, along with BEUC, are seeking action against social media platforms for their alleged facilitation of misleading crypto promotion.
Q: What measures does BEUC propose to address the issue?
A: BEUC proposes the adoption and enforcement of stricter advertising policies on platforms promoting crypto. They also suggest implementing measures to prevent influencers from misleading consumers about the nature of crypto assets, emphasizing their volatility and speculative nature.
Q: Is there any existing regulation addressing crypto promotion on social media?
A: While the EU has enacted the Markets in Crypto Assets (MiCA) legislation to regulate the sector, BEUC points out that it does not extend to social media companies. BEUC is urging the relevant authorities to ensure that Instagram, Youtube, Tiktok, and Twitter fulfill their responsibility to protect consumers from crypto scams and false promises.
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6 comments
Wow, it’s about time someone stepped in to stop the misleading crypto ads on social media. These platforms should take responsibility and protect their users from scams. Protecting consumers is crucial!
Finally, consumer organizations are speaking up against the risky crypto promotion. Those ads promising quick riches are nothing but empty promises. Consumers deserve better protection and stricter regulations.
I completely agree with BEUC! Social media platforms need to crack down on misleading crypto ads. People are being tricked into risky investments without knowing the consequences. Let’s hope authorities take action soon!
It’s good to see organizations like BEUC fighting for consumer rights. Social media platforms have become a breeding ground for misleading crypto promotions. Stricter advertising rules will help users make more informed decisions.
As an investor, I’ve seen so many fake promises on social media. It’s high time these platforms take responsibility and protect their users. The risks associated with crypto investments should be made clear to everyone.
While regulation is necessary, let’s not forget that crypto can also be a great opportunity for investors. We need a balance between protection and allowing legitimate promotions. Let’s hope the authorities find the right solution.