Authorities in the United Kingdom have launched an initiative to stop influencers from promoting illegal financial schemes.
The Financial Conduct Authority (FCA) and the Advertising Standards Authority (ASA) have partnered with Love Island star Sharon Gaffka to warn financial influencers (finfluencers) about the potential legal consequences of promoting illegal "get rich quick" schemes.
On April 6th, regulators in the United Kingdom mentioned cryptocurrencies and non-fungible tokens in its seven-part checklist, helping finfluencers operate within the law.
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The checklist urges finfluencers to assess whether they are the right person to endorse a financial product and highlights the potential for their followers to "lose all their money" from the investment. The list also states:
Don't suggest to your followers that cryptoassets would be an easy investment decision or create any sense of urgency or FOMO.
In addition to carrying out "due diligence," social media influencers need to secure FCA approval and verify that their ads meet ASA rules by being legal, truthful, and explicitly marked as an advertisement.
Both the FCA and ASA strongly suggest that influencers use ScamSmart to ensure they are not endorsing investment scams. The checklist's motto is "If in doubt, don't promote."
Promoting financial products or services unlawfully is a crime punishable by up to two years in prison and an unlimited fine. FCA's executive director Sarah Pritchard commented on the illegal promotions by stating:
Often, they do this without knowledge of the rules and without understanding the harm they could cause their followers.
On top of that, Sarah Pritchard warned finfluencers that "if <their> post breaks the rules, the ASA will take action."
When asked about the initiative, social media influencer and Love Island star, Sharon Gaffka, noted:
This campaign with the FCA and ASA will hopefully make sure other influencers stay on the right side of the law and prevent them from unknowingly introducing their followers to scams or high-risk investments.
In the coming months, the FCA intends to conduct an "open roundtable discussion" with influencer agents and the Influencer Marketing Trade Body.
It is worth noting that, in February, Financial Conduct Authority (FCA) revealed plans to tighten crypto-related advertisements.
