On June 8, the European Consumer Organisation (BEUC) — an umbrella group for 46 independent consumer organizations from 32 countries — published a report titled: “Hype or harm? The Great Social Media Crypto Con.“ In the 20-page document, the group states that consumers are not fully aware of the risks associated with crypto.
Today BEUC & consumer groups in 8 countries are taking action against TikTok, Instagram, Twitter & YouTube for facilitating the misleading promotion of crypto assets on social media . We've filed a complaint with @EU_Commission and consumer authorities: https://t.co/b6NYsBl4VM pic.twitter.com/w5iLMy4h1i— The Consumer Voice (@beuc) June 8, 2023
The report draws examples from Instagram, YouTube, Twitter and TikTok, calling them “key players” in crypto advertising. In the case of Facebook, it notes that crypto advertisements skirt rules, forbidding the promotion of non-licensed financial platforms. The announcement stated:
“TikTok, Instagram, Twitter & YouTube are responsible for allowing misleading advertisements of crypto to multiply through ads & influencers. This is an unfair commercial practice, exposing consumers to serious harm (loss of significant amounts of money).“
Concerning Twitter, the report nods at Elon Musk’s move to use Doge, a mascot for Dogecoin (DOGE), despite the platform’s own prohibition of crypto ads. The BEUC also mentions so-called “finfluencers” as “an important source of information” for a younger audience.
Despite efforts of national regulators to combat misleading promotion, the problem still lacks a complex approach. According to the report, a legal base already exists to take European Union-level measures — the Unfair Commercial Practices Directive — and a body to lead the enforcement called the Consumer Protection Cooperation Network (CPCN).
“The problem continues to be addressed at national level mainly while it would require a common approach by the CPC Network acting collectively on the basis of the UCPD and targeting the platforms used for the promotion of crypto assets and related services.”
Meanwhile, in France, the Senate approved an amendment allowing registered crypto companies to hire social media influencers for advertising and promotional purposes.