BEUC, an umbrella group of European consumer organizations, filed a complaint with European Union consumer protection bodies calling for Instagram, YouTube, TikTok and Twitter to toughen their crypto advertising rules.
National regulators should require social media networks to tighten their policies and ban influencers from promoting crypto, the complaint said.
“Consumers are increasingly being promised ‘get rich quick’ investments by ads and influencers on social media,” Director General Monique Goyens said in a statement. “Unfortunately, in most cases, these claims are too good to be true and consumers are at a high risk of losing a lot of money without recourse to justice."
Under the EU’s forthcoming Markets in Crypto Assets regulation, MiCA, crypto providers will need a license to advertise across the bloc, and the parallel Digital Services Act imposes extra constraints on large online platforms.
BEUC said extra measures are nevertheless needed under existing consumer laws that prohibit unfair commercial practices because crypto scams could expose people to heavy financial losses.
“Online platforms have a duty and an obligation of professional diligence” under EU rules to counter unfair commerce, Goyens added, saying that some networks are breaching their own ad policies.
In theory, national consumer authorities can levy fines on transgressors of consumer law, though Goyens said she wanted sanctions to be tougher. In a case last year, TikTok promised to comply with EU strictures after BEUC complained of hidden marketing and aggressive ads targeting children.
BEUC staffer Agustín Reyna told reporters that social media networks took different approaches to moderating content, but he expected that if they could not stop interactions with misleading material that they should ban all crypto promotions outright.
France recently passed landmark legislation to regulate influencers – social media users who use their clout to promote goods and services. Under the law, crypto promotions will be allowed only for crypto firms that are registered with regulators.
CoinDesk has reached out to Twitter, Instagram, TikTok and YouTube for comment.
UPDATE (June 8, 10:16 UTC): Adds press conference quotes from Goyens, Reyna starting in sixth paragraph, detail of earlier TikTok case.
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