Social media platforms have long been fertile ground for scammers pushing cryptocurrency schemes, but EU agency BEUC and its member organizations have now issued a stark warning to European authorities regarding the deceptive promotion of digital assets on leading social media networks.
The EU agency fingers TikTok and Instagram
In a comprehensive 20-page report, the EU agency categorically criticizes digital assets as highly risky and susceptible to scams. The report sheds light on the impact of digital assets on consumers, presenting quantitative data on their usage across various nations and shedding light on the operations of crypto influencers.
Instagram, Twitter, YouTube, and TikTok are specifically highlighted in the report, with the BEUC referring to the combination of social media networks, influencers, and cryptocurrency as a “toxic cocktail.” The group accuses these platforms of having lax policies, labeling them as “dubious,” and points out that scammers often target unsuspecting teenagers. Additionally, the report emphasizes the role of “influencers” who make enticing promises that ultimately prove too good to be true.
The EU agency is a collective of 45 independent consumer organizations spanning 31 countries. Its primary objective is to represent these institutions within the European Union (EU) and safeguard consumer interests, with areas of focus including sustainability, financial services, health, and international affairs.
Monique Goyens, Director General of BEUC, stressed in a press release that “crypto promotion involves scams and unfair commercial practices,” acknowledging the extensive documentation available on this issue. Goyens further highlighted that while cryptocurrency will soon be regulated under the new Markets in Crypto Assets (MiCA) legislation, these regulations do not extend to social media companies profiting from crypto advertising at the expense of consumers.
The agency wants regulators to enforce stricter consumer protection laws
The EU agency contends that the European Union’s consumer laws have been violated and calls upon the European network of national consumer authorities (CPC-Network) to take action and enforce stricter advertising policies on these platforms. Ironically, despite the damning report, European authorities have already been actively combating crypto scams. In 2022, they turned to social media themselves, launching educational campaigns to raise investor awareness about the crypto asset class.
The European Union has been a pioneer in crypto legislation, exemplified by the recent approval of the Markets in Crypto Asset (MiCA) legislation. This regulatory framework aims to dismantle the “wild west” mentality prevalent in the digital assets space, bringing greater stability and protection to investors. As the issue of misleading cryptocurrency promotion on social media gains further attention, the BEUC’s report serves as a call to action for stricter regulations and increased vigilance in combating scams, ultimately safeguarding consumers from potential harm.
