On June 8, the European Consumer Organization (BEUC) -a group comprising 46 independent consumer organizations from 32 countries- published a report titled: “Hype or Harm? The Great Social Media Scam.” In the 20-page document, the group claims that consumers are not fully aware of the risks associated with cryptocurrencies.
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: pic.twitter.com/w5iLMy4h1i
— The Consumer Voice (@beuc) June 8, 2023
Today BEUC and consumer groups from 8 countries are taking action against TikTok, Instagram, Twitter and YouTube for facilitating the misleading promotion of crypto assets on social media. We have filed a complaint with the @EU_Commission and consumer authorities:
The report cites examples from Instagram, YouTube, Twitter and TikTok, which it calls “key players” in crypto advertising. In the case of Facebook, he points out that crypto ads break the rules, since the promotion of financial platforms without a license is prohibited. According to him release:
“TikTok, Instagram, Twitter and YouTube are responsible for allowing deceptive cryptocurrency ads to multiply through ads and influencers. This is an unfair commercial practice, which exposes consumers to serious harm (loss of significant amounts of money).“
As far as Twitter is concerned, the report winks at Elon Musk’s move to use Doge, a mascot for Dogecoin (DOGE), despite the platform’s own ban on crypto-ads. The BEUC also mentions so-called “finfluencers” as “an important source of information” for a younger audience.
Despite the efforts of national regulators to combat misleading promotion, the problem still lacks a complex approach. According to the report, there is already a legal basis for adopting measures at the European Union level – the Directive on Unfair Commercial Practices – and a body in charge of directing the application of the regulations called the Consumer Protection Cooperation Network (CPCN) .
“The problem is still being addressed at the national level mainly, but it would require a common approach by the CPC Network: it should act collectively on the basis of the UCPD and go after the platforms used for the promotion of crypto assets and related services.”
The report calls on the CPCN to require social media platforms to enforce stricter conditions in their advertising policies, including prohibiting influencers from promoting crypto products in their terms of use, and to submit reports to the European Commission on the effectiveness of the measures applied.
For his part, In France, the Senate passed an amendment allowing registered crypto companies to hire social media influencers for advertising and promotional purposes.
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