Sword pointing towards crypto KOL! UK regulatory body FCA issues second warning on meme advertising: Offenders could face up to 2 years in prison
The Financial Conduct Authority (FCA) of the UK issued a public warning yesterday, the 27th, regarding "financial influencers" in the cryptocurrency industry, emphasizing the importance of using appropriate language when publishing content related to financial products and investment advice without authorization. The warning specifically mentioned platforms such as Telegram and Reddit, which are prone to widespread dissemination of misinformation.
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FCA Releases "Guidance on Financial Services Promotion through Memes, Reels, and Game Livestreams"
According to the latest guidance from the FCA on promoting financial services through memes, short video reels, and game livestreams, the regulatory body will oversee financial influencers (finfluencers) and the prevalent use of meme marketing in the cryptocurrency sector.
In particular, the content of this guidance is not significantly different from last year's "Social Media Guidance," focusing on biased narratives, lack of risk disclosure, and failure to disclose legal protection, issuing warnings to social media users once again.
This is not the first time the FCA has focused on meme content. In a statement last July, the regulatory body began regulating potential illegal financial promotion activities on various social media platforms, specifically mentioning the trending memes and exaggerated profit claims in the cryptocurrency space.
Warning on Crypto Memes! UK Regulatory Authority: Memes Could Be Seen as Investment Promotion Tactics
FCA: Attention to Crypto KOLs
In a statement, Lucy Castledine, Consumer Investments Director at the FCA, emphasized that financial marketing should be transparent and non-misleading, and any promotion of financial products in the UK should be authorized and approved:
This is not just about liking posts; it is about compliance with the law, and we will take action against those who provide investment advice unlawfully.
She also cautioned that "influential crypto KOLs promoting financial products without FCA authorization may constitute a criminal offense, with a maximum penalty of 2 years' imprisonment, an unlimited fine, or both."
The FCA further emphasized that it had taken action against over 10,000 non-compliant or misleading crypto advertisements last year and will continue to do so:
Investors should remain vigilant against suspicious ads and scams online, but more importantly, influencers should ensure compliance with the rules and consider the consequences of engaging in illegal product promotion.
Telegram and Reddit Named
Furthermore, the FCA also named the two major communication and social media platforms, Telegram and Reddit, as popular hubs for the widespread dissemination of crypto memes:
Financial influencers (finfluencers) who are not authorized by the FCA often share their investment opinions through public forums like Reddit and private chat rooms like Telegram on social media, where they are even considered financial experts.
Last week, Telegram was accused by local media of spreading unauthorized content and was ordered by a Spanish court to suspend services. Previously, the platform was also embroiled in controversy due to criminal concerns arising from its dealings with pro-Russian hacker groups.
Memes: Love Them or Hate Them
As a controversial element in the crypto market, memes have always been a topic of discussion. The pre-sale frenzy of SOL meme coin was criticized by Ki Young Ju, founder of CryptoQuant, who called meme coins essentially a casino that only fuels the crypto industry.
Examining the Chaos of SOL Meme Coin Pre-Sale! CryptoQuant Founder Criticizes Casino: No Benefit to the Industry
However, Maartje Bus, Deputy Head of Research at the crypto database Messari, believes that meme coins have inadvertently introduced newcomers to Web3 and complex concepts like decentralization and crypto wallets, serving as a "Trojan horse" for the crypto industry.
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