UK Watchdog: Crypto Memes May Count as Ads

The United Kingdom's financial regulator, the Financial Conduct Authority (FCA), has proposed new rules for cryptocurrency advertisements. The proposal targets memes and influencers promoting finance—called "finfluencers"—on social media.

The FCA said many crypto companies use memes for promotion, but many people don't know these are subject to advertising rules. They emphasized that any type of communication could be seen as a financial promotion.

Cryptocurrency is seen as high-risk by the FCA. It can be promoted to ordinary people but must include risk warnings and not offer investment incentives.

In the last three months of 2022, the FCA had to intervene with 69% of financial promotions from authorized firms on websites or social media. These ads had to be changed or removed.

The FCA wants to update its 2015 guidance on this matter. The goal is to make it clear what it expects from marketers when promoting financial products.

The FCA is also concerned about finfluencers who promote financial products they know little about. This is often aimed at a younger audience. 

The FCA warns that such promotions could lead to up to two years in jail, unlimited fines, or both. This law applies even to ads from outside the U.K. that could influence people in the country.

The FCA cited a report saying that 60% of 18-29 year-olds follow social media influencers. Three-quarters of these young people trust the advice given by the influencers.

In 2021, the FCA found that 58% of people under 40 cited social media hype as a reason for investing in high-risk products. 

Public comments on the new proposal are open until September 11.