Crypto enthusiasts worldwide are keenly aware of the growing influence of tech giants like Meta and Alphabet on the industry. However, this influence has not been without its share of controversy, particularly when it comes to advertising policies in the European Union (EU). The European Consumer Group (BEUC) has recently lodged a complaint with the European Commission and consumer authorities, stating that these tech giants must implement stricter crypto advertising policies within the EU.
BEUC’s concerns stem from the potentially misleading nature of crypto-related advertisements on popular platforms like Instagram, YouTube, TikTok, and Twitter, many of which feature endorsements from influential figures. The group argues that such ads can paint a falsely positive picture of the industry and potentially lead consumers to underestimate the risks associated with crypto investments.
This issue is made even more complex by the history of crypto-related advertising on these platforms. Back in 2018, both Instagram (Meta) and YouTube (Google) had banned cryptocurrency promotion but later allowed it under a relatively weak approval process. Critics argue that this lax approach does not do enough to protect consumers from misleading claims about the benefits of crypto investments while downplaying the potential risks.
One notable example involves Twitter CEO Elon Musk changing the platform’s logo to a Dogecoin symbol in April 2023, which led to a 30% surge in the cryptocurrency’s value in just a few hours. BEUC believes that such incidents contribute to a false perception of crypto investments, preventing consumers from understanding the risks they entail.
Instances of crypto advertising on TikTok have also been discovered despite the platform’s ban on crypto-related content. Furthermore, influencer endorsements are a significant concern, as they often involve misleading advice that may be harmful to consumers.
The Market in Crypto Assets (MiCA) regulation is set to introduce sweeping crypto regulations in the EU by early 2025. However, critics argue that this legislation may not do enough to address the role social media companies play in advertising crypto assets. To ensure that these platforms fulfill their duty to protect consumers against crypto scams and false promises, BEUC is urging more robust rules and enforcement from authorities.
In the meantime, other regulators, such as the UK’s Financial Conduct Authority (FCA), are working on finalizing their rules for crypto advertisements. With new measures like clear risk warnings, preventing misleading advertisements, and giving investors the option to withdraw from investments within a specific timeframe, it is clear that the regulatory landscape for cryptocurrency advertising will continue to evolve.
In conclusion, the actions of tech giants like Meta and Alphabet in the crypto advertising space have drawn the attention of regulators and consumer advocacy groups. Striking the right balance between promoting innovation and protecting consumers will be a paramount concern in adopting more stringent advertising policies for the rapidly growing crypto industry.
Source: Blockworks
