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An influential consumer group attacked TikTok, Twitter, YouTube and Instagram on Thursday, complaining to consumer regulators and the European Commission for spreading misleading crypto ads on the social platforms, opening the possibility of regulatory action against the Union amid growing international pressure. : Reduce the industry and protect consumers.
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European consumer organization BEUC filed a complaint with the European Commission and consumer regulators for "allowing the distribution of misleading crypto-asset advertising on its platforms."
According to complaints filed with the group's nine member institutions, crypto-investments are highly volatile and speculative, exposing consumers to serious harm, including fraud and the risk of losing large sums of money.
Despite the well-documented risks and growing publicity associated with investing in cryptocurrencies, the complaint says that few consumers are aware of their risks and that advertisers and agents promoting crypto products on the platforms do not openly promote them.
"Consumers are increasingly being promised get-rich-quick investments through social media advertising and influencers," says BEUC CEO Monique Goyen. Many of these are "too good to be true" and put consumers at risk of losing them. a lot of money without treatment.
BEUC called on the European Consumer Cooperation Network, a coalition of national regulators working together at EU level, to introduce stricter guidelines for crypto advertising platforms and to take measures to prevent "operators from misleading consumers about the nature of crypto currencies".
The group also called on European consumer protection agencies to work with financial regulators to prevent misleading cryptocurrency advertising.
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Regulatory authorities at EU or national level can respond to complaints against social platforms and can take regulatory action to punish companies or encourage them to change their practices. It is unclear whether they will decide to do so, or in what time frame if they do.
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BEUC also asked the Network of European Consumer Protection Authorities to assess how effective the measures are in place to protect consumers against unfair practices such as misleading classified ads. The European Commission is one of the EU's three central institutions and a strong proponent of new laws and regulations of international importance. While the bloc recently adopted the world's first comprehensive cryptocurrency code, which will take effect in 2024, Goyens said the legislation "does not apply to social media companies that use cryptocurrency advertising at the expense of consumers." future settlement.
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Although cryptocurrencies are not particularly new, interest in them has increased over the past year. Many areas of the market fall within or outside of existing regulations, facing lawmakers and regulators who refuse to keep up with the industry. Unpredictable and volatile markets, theft, fraud, misinformation and misleading advertising have fueled interest. Celebrities and high-profile figures like Kim Kardashian, Lindsay Lohan and Jake Paul continue to promote fan ads and cryptocurrency, which regulators say could be illegal. The collapse of major institutions like Sam Bankman-Fried's FTX and Binance's allegations of widespread misconduct have highlighted the lack of compliance and provided an outlet for regulators who take the industry seriously.
Other reading
Exaggeration or damage? Big Social Network Crypto Scam (BEUC).
The untold story behind Emax Kim Kardashian criticized for valuing cryptocurrency (Forbes)