UK Regulator Confirms Financial Promotion Rules Apply to Influencers and Crypto Memes

The Financial Conduct Authority (FCA) in the UK has officially confirmed that social media influencers and crypto memes fall under the country’s rules for financial promotions. This announcement comes after the regulator brought the crypto sector into the scope of its financial promotions rules last year.

In finalized guidance published on Tuesday, the FCA stated that any type of communication, including memes and other similar content circulated on social media, can be considered a financial promotion and therefore subject to the financial promotion restriction. The use of memes in promotions is particularly prevalent in the crypto-asset sector, according to the guidance.

The FCA’s regulations apply to both paid and unpaid influencers, with the guidance emphasizing that influencers operating in the “course of business” are subject to the rules. This means that influencers who are employed or have a commercial interest in posting financial promotions must comply with the FCA’s regulations.

The guidance is based on the FCA’s promotions regime, which prohibits businesses from communicating invitations or inducements to engage in investment activity unless the promotion is communicated by an authorized person or a person with an exemption. As a result, crypto firms and promoters must now register with the FCA or have their ads approved by someone with the necessary credentials.

Additionally, the FCA requires firms and promoters to include clear risk warnings on their websites and communications, as well as provide first-time buyers with a 24-hour cooling-off period before finalizing purchases. This is aimed at protecting consumers and ensuring that they are fully informed about the risks associated with investing in crypto assets.

The FCA’s move to include social media influencers and crypto memes in its financial promotions rules reflects the growing scrutiny of the crypto sector in the UK. In 2022, former reality show contestants Jessica and Eve Gale were warned to stop misleading their followers with pro-crypto posts, highlighting the need for stricter regulations in the industry.

Overall, the FCA’s guidance aims to promote transparency and accountability in the crypto sector, ensuring that consumers are protected from misleading or deceptive promotions. By bringing influencers and memes under its regulatory scope, the FCA is taking proactive steps to safeguard investors and maintain the integrity of the financial market.