UK regulators warn influencers of risks of promoting NFTs and cryptocurrencies

theguardian.com:

The UK financial and advertising regulators have warned social media influencers of the risks of promoting “get-rich-quick schemes” such as cryptocurrencies and non-fungible tokens to their followers.

The Financial Conduct Authority and Advertising Standards Authority have launched a campaign to prevent content creators from marketing investment scams and risky financial products.

The watchdogs have teamed up with the former Love Island contestant Sharon Gaffka to ask financial influencers – or “finfluencers” – and their agents to consult a checklist before accepting brand deals for financial products and services.

Sarah Pritchard, the executive director of markets at the FCA, said: “We’ve seen more cases of influencers touting products that they shouldn’t be. They are often doing this without knowledge of the rules and without understanding of the harm they could cause to their followers.

“We want to work with influencers so they keep on the right side of the law, as this will also help protect people from being shown scams or investments that are too risky.”

The checklist warns online personalities that making an unlawful financial promotion is a criminal offence that carries a maximum sentence of two years’ imprisonment and an unlimited fine.

It also includes a reminder that the ASA will take action if the rules around promoting cryptocurrencies and non-fungible tokens (NFTs) are broken, and that their followers could lose all their money if they invest in crypto.

The watchdogs said investment scams were on the rise and influencers could be “unknowingly introducing followers to criminals”.

Influencers also need to label their posts as adverts if they receive any form of payment from the brand they are working with.

Rio