The intertwining of social media influencers and cryptocurrency promotions has been gaining considerable attention, highlighted by the U.K.’s Financial Conduct Authority’s (FCA) recent oversight. According to the FCA, influencers who hope to be hired or garner more views by promoting financial products may find themselves in hot water if they fall afoul of financial advertising rules.
Whether influencers are paid upfront or anticipate indirect benefits, they’re considered to be within the scope of enforcement. A notable part of this surveillance is a cautionary reminder about ‘illegal financial promotion’. This pertains to influencers who disseminate financial promotions without the approval from an authorized person. While the prime goal might be to keep the community informed, such actions could potentially tip towards unfair and misleading promotions.
Even prior to the FCA’s declaration, social media giants dabbling with cryptocurrency found themselves under close watch. Interestingly, Jessica and Eve Gale, known for their participation in the U.K. reality show Love Island, had previously been admonished for luring their Instagram followers with pro-cryptocurrency posts, by none other than the Advertising Standards Authority.
To regulate the industry, the FCA rolled out promotion rules explicitly for the crypto-sector in June. As per these regulations, attempts to draw investors using financial incentives, for instance, airdrops, are prohibited. Furthermore, companies dealing with cryptocurrencies must include clear risk warnings within their advertisements.
Interestingly, registered crypto companies are allowed to endorse their ads but only for a limited duration, following the implementation of the new financial promotions structure in October.
This entire situation brings forth mirrored thoughts on regulation and freedom. On one hand, having a regulatory body seems essential to protect the community from potentially misleading or harmful promotions circumventing legal channels. On the other, it could lead to a stifled space for influencers, perhaps even depriving innovative start-ups of much-needed traction.
In essence, the interplay between influencers and cryptocurrency promotions goes far beyond mere financial exchange. It walks a thin line – on one side, protecting the community, and on the other, impeding creativity. While steering clear of unregulated cryptocurrency promotions is a step forward, it simultaneously brings about thought-provoking questions on the matter of control and innovation within the crypto-sphere.
Source: Coindesk
