European Consumer Organization filed a complaint to the European Commission against popular social networks. And insists on controlling the promotion of crypto products at the EU level
The EU has called for stricter rules on advertising of cryptocurrencies in social networks. On June 8, the European consumer organization BEUC reported that it and its branches in nine European countries filed a complaint with the European Commission. As well as consumer protection authorities on Instagram, YouTube, TikTok and Twitter. For facilitating the misleading promotion of crypto-assets.
BEUC alleges that cryptomarketers on popular social networks are misleading users. And putting them at serious risk. And popular social networks allow the circumvention of rules prohibiting the promotion of unlicensed financial products.
The organization, which brings together 45 independent consumer organizations from 31 countries. Published a report titled “Hype or Harm? The Great CryptoAsphere in Social Media.” And in which it cites various evidence that cryptocurrency is being promoted on social networks. Which contradicts the platforms’ own advertising policy.
The document states that TikTok, Instagram, Twitter and YouTube are liable for not preventing misleading cryptocurrency ads from appearing in ads and influencer accounts. The BEUC also mentions so-called finfluencers (financial influencers). Who often pass themselves off as experienced traders.
The authors of the report point out that bloggers have become an important source of information for young audiences. Which, in turn, is more prone to buy cryptocurrencies without proper risk assessment than older generations.
According to this report, there is already a legal basis for action at the European Union level. This is the Unfair Commercial Practices Directive. And a body to guide enforcement called the Consumer Protection Cooperation Network (CPCN).
Our experts point out that the BEUC calls on the CPCN to require social networks to introduce stricter advertising policies. As well as to control the promotion of cryptocurrencies by Influencers. As well as to send reports to the European Commission on the effectiveness of the introduced measures.
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