The Association of Financial Users of Spain (AFUE) has filed a lawsuit against Twitter, TikTok, YouTube and Instagram alleging that social media platforms allow the misleading promotion of cryptocurrencies. The lawsuit, which was filed in a Madrid court, requests compensation of 10 million euros for users who have been harmed by misleading advertising.
The AFUE claims that social media platforms have not taken adequate measures to prevent the promotion of scams and fraud related to cryptocurrencies. The lawsuit cites several examples of deceptive cryptocurrency advertising that has been allowed on the platforms, including ads that claim to offer guaranteed returns on investment or that use celebrity endorsements to promote scams.
The AFUE is not the first group to take legal action against social media platforms for their role in promoting cryptocurrency scams. In 2021, the Federal Trade Commission (FTC) filed a lawsuit against YouTube, alleging that the platform had failed to adequately monitor its advertising policies and had allowed scammers to run ads that scammed consumers out of millions of dollars.
The lawsuit filed by the AFUE is a sign that regulators and consumers are increasingly concerned about the risks associated with investing in cryptocurrencies. Social media platforms have a responsibility to protect their users from scams and fraud, and must take steps to ensure that cryptocurrency advertising is accurate and transparent.
Here are some of the things that social media platforms can do to prevent the promotion of cryptocurrency scams:
Implement stricter advertising policies: Social media platforms must implement stricter advertising policies that prohibit the promotion of scams and fraud. These policies must be clearly communicated to advertisers and must be applied consistently.
Provide more transparency about cryptocurrency advertising: Social media platforms should provide more transparency about cryptocurrency advertising. This could include requiring advertisers to disclose more information about their products and services, such as the risks involved in investing in cryptocurrency.
Educate users about the risks of investing in cryptocurrencies: Social media platforms must educate their users on the risks of investing in cryptocurrency. This could include providing information on how to spot scams and fraud, and how to protect yourself from financial loss.