The UK Financial Conduct Authority (FCA) has issued new guidance focusing on the social media financial promotions of crypto companies and influencers (finfluencers) in the country. The FCA emphasized that many people are unaware that promotion memes are endorsements for crypto companies, which are subject to advertising rules. Therefore, the FCA highlighted that any promotion, regardless of its form of communication, could be considered a financial promotion.

Crypto investments, considered high-risk, are permitted to be advertised to retail investors by the FCA, but specific requirements such as risk warnings and banning investment incentives are imposed. According to the FCA, 69% of financial promotions on authorized companies' websites or social media were amended or withdrawn after regulatory intervention in the fourth quarter of 2022.

FCA's Concerns:

One of the main reasons for the FCA's issuance of this guidance is the increasing number of finance-focused influencers promoting financial products to young audiences without sufficient knowledge. Referring to a report that showed over 60% of individuals between the ages of 18 and 29 follow social media influencers, with 75% trusting their advice, the FCA indicated that young people can be influenced through social media sponsorships. #MEMECOINS

Furthermore, based on a survey conducted by the FCA in 2021, 58% of participants under the age of 40 cited social media enthusiasm and news as the reason for investing in cryptocurrencies, which the regulator considers a high-risk situation.

Guidance and Warnings:

The FCA aims to provide marketers with clearer expectations regarding promotions through this updated guidance, which builds upon the 2015 guidance. Specific warnings have been issued regarding disclaimers in crypto memes and the legal consequences for financial influencers promoting products without sufficient knowledge.

The FCA stressed that promoting financial products without adequate expertise could lead to serious legal consequences, including up to two years in prison, an unlimited fine, or both. It should be noted that this law applies not only to promotions originating outside the UK but also to promotions that could affect the country. #pepe #SHIBAINU #DOGECOIN $PEPE $DOGE $SHIB

In Summary:

The FCA's proposed guidance seeks to regulate the financial promotions of crypto companies and influencers, ensuring compliance with advertising laws. Its primary objective is to protect the influence of social media sponsorships on young individuals and encourage them to become informed investors. By increasing awareness of the legal and financial risks associated with influencers promoting financial products without sufficient knowledge, the FCA promotes financial security. #FCA