BEUC, the European Consumer Organization, has urged Brussels to clamp down on the promotion of crypto assets on social media. The umbrella group calls for implementing stricter advertising rules on major platforms like Twitter and Tiktok as well as preventing influencers from misleading investors.
BEUC Complains About Promotion of Risky Crypto to European Consumers on Social Media
The European Consumer Organization, better known by its French abbreviation BEUC (Bureau Européen des Unions de Consommateurs), has filed a complaint with the European Commission and consumer authorities in the EU against Tiktok, Twitter, Instagram, and Youtube, alleging that they 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 which “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 unites 45 European consumer protection organizations from 32 countries in the European Union, the European Economic Area (EEA), and applicant nations. The complaint has been filed together with nine of its members in Denmark, France, Greece, Italy, Lithuania, Portugal, Slovakia, and Spain.
The Bureau claims in the report there’s ample evidence of the misleading promotion of crypto on said platforms that contravenes their own advertising policies. It also calls on the Consumer Protection Cooperation Network, a body bringing together public authorities competent in the field of consumer protection, to request certain changes from the companies.
European Authorities Urged to Ensure Social Media Giants Protect Users From Scams
The organization insists on the adoption and enforcement of stricter advertising policies by the platforms promoting crypto as well as implementing measures to prevent influencers from misleading consumers in regards to the nature of crypto assets which it describes as volatile and speculative.
“Consumers are increasingly being promised ‘get rich quick’ investments by ads and influencers on social media. Unfortunately, in most cases, these claims are too good to be true,” BEUC Director General Monique Goyens was quoted as stating.
Goyens noted that the sector will soon be regulated with the EU’s newly adopted Markets in Crypto Assets (MiCA) legislation. However, she also pointed 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 fulfil their duty to protect consumers against crypto scams and false promises.
BEUC’s action coincides with the introduction of tougher advertising rules for businesses marketing crypto assets to U.K. consumers by Britain’s Financial Conduct Authority (FCA) this week. The watchdog said it wants to ensure investors are duly warned about the risks, banned ‘refer a friend’ bonuses, and imposed a cooling-off period for first time crypto buyers.
Do you expect consumer protection authorities in Europe to make it harder to promote crypto on social media? Tell us in the comments section below.
