European Consumer Organization Calls for Curbing Crypto Promotion
The European Consumer Organization (BEUC) has urged Brussels to safeguard European consumers against crypto promotion on popular social media platforms. BEUC is pushing for tighter regulations on Twitter and TikTok, aiming to prevent influencers from misleading potential investors.
BEUC Files Complaint Against Social Media Giants for Misleading Crypto Promotion
The European Consumer Organization, known by its French abbreviation BEUC (Bureau Européen des Unions de Consommateurs), has lodged a complaint with the European Commission and consumer authorities in the EU against TikTok, Twitter, Instagram, and Youtube. Their claim alleges that these platforms facilitate misleading crypto promotion.
“These social media companies are responsible for allowing misleading advertisements of crypto assets to multiply on their platforms (both through advertising and influencers),” the bureau said in an announcement presenting its “Hype or Harm? The Great Social Media Crypto Con” report.
This constitutes an unfair commercial practice that “exposes consumers to serious harm, i.e., the loss of significant amounts of money,” the organization added, suggesting that crypto is still a highly risky investment product that it deems “not suitable for many consumers.”
Established in 1962, BEUC represents a union of 45 European consumer protection organizations from 32 countries within the European Union, the European Economic Area (EEA), and applicant nations. The complaint, jointly filed by nine of its members across Denmark, France, Greece, Italy, Lithuania, Portugal, Slovakia, and Spain, highlights the ample evidence of misleading crypto promotion on the aforementioned platforms, violating their advertising policies.
BEUC Calls for Protection of Consumers Against Misleading Crypto Ads on Social Media
BEUC urges the Consumer Protection Cooperation Network, a collective of public authorities responsible for consumer protection, to request the necessary changes from the implicated companies. The organization insists on the adoption and enforcement of stricter advertising policies to prevent influencers from misleading consumers about the nature of crypto assets, emphasizing their volatility and speculative nature.
Monique Goyens, Director General of BEUC, warned consumers about the prevalence of "get rich quick" investment claims on social media, stating that such promises often prove to be too good to be true. While acknowledging the forthcoming regulation of the sector through the EU's Markets in Crypto Assets (MiCA) legislation, Goyens highlighted the need for social media firms to fulfil their duty of protecting consumers against crypto scams and false promises.
She also pointed out that the law does not apply to social media firms “benefiting from the advertising of crypto at the expense of consumers” and elaborated:
"We are turning to the authorities in charge of protecting consumers to ensure Instagram, Youtube, Tiktok, and Twitter fulfill their duty to protect consumers against crypto scams and false promises."
BEUC's efforts coincide with the introduction of stricter advertising regulations by the Financial Conduct Authority (FCA) in the United Kingdom, aimed at protecting consumers of crypto assets. Britain’s Financial Conduct Authority (FCA) aims to ensure investors are adequately warned about the risks associated with cryptocurrencies, while also implementing a ban on "refer a friend" bonuses and introducing a cooling-off period for first-time crypto buyers.
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