- Misleading crypto ads on social media are being targeted in the EU.
- Instagram, Twitter, Tiktok, and YouTube are all in the firing line.
- This complaint could be a watershed moment for crypto advertising controls.
Crypto scams have, unfortunately, been weaved into the fabric of this digital asset sector. However, the line between promoting legitimate and scam crypto projects across social media sites is also fine.
On June 8, European consumer group BEUC complained to the European Commission and consumer authorities that Instagram, YouTube, TikTok, and Twitter have allegedly facilitated the misleading promotion of crypto assets.
A New Era of Crypto Regulation
Globally and in the EU, there has been a change in how crypto is viewed and regulated. Last year’s high-profile bankruptcies and collapses of companies like TerraUSD, 3AC, and FTX, regulators and consumer protection agencies have been on high alert.
Additionally, the EU introduction of the world’s first comprehensive set of rules for crypto asset regulation (MiCA) has provided a framework for crypto companies to adhere to, leaving no grey areas for misleading crypto promotion.
BEUC, in its complaint, said the proliferation of misleading advertisements of crypto assets on social media platforms is an unfair commercial practice as it exposes consumers to serious harm – such as the loss of significant amounts of money.
As previous crypto failures have led to heightened awareness and new legislative frameworks have instilled laws to follow, so new aspects of the digital asset sector are being scrutinized.
BEUC has requested Consumer Protection Cooperation Network to require social media platforms to adopt stricter advertising policies on crypto and take measures to prevent influencers from misleading consumers.
The Network should subsequently inform the European Commission about the effectiveness of these measures, BEUC said in its joint complaint with nine of its members.
“Crypto will be regulated soon with the new Market in Crypto Assets Regulation, but this legislation does not apply to the social media companies benefiting from the advertising of crypto at the expense of consumers,” BEUC Director General Monique Goyens said in a statement.
High Profile Advertising
Crypto’s time in the advertising sun reached its height around the 2022 Super Bowl in February of that year. Crypto.com, Coinbase, and FTX all had multi-million dollar adverts running at the prime-time event.
Since then, FTX has dramatically collapsed, leaving many users out of pocket while Coinbase is locked in legal battles with the SEC. These types of high-level advertising have since slowly slipped away, but there is still a large cohort of influencers and social media ads pushing misleading promotion of crypto.
On the Flipside
- Crypto.com, FTX, and Coinbase were among the companies that paid upwards of $6.5 million for ad spots at the 2022 Super Bowl, while there were no crypto ads in 2023.
Why This Matters
The regulation and bringing under control of the crypto space will be a multi-faceted endeavor. Advertising and promoting crypto is a powerful tool, and without standards set to protect investors, there would be a lot of room for scams to proliferate.
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