The regulator warned that even memes may represent breaches of the UK’s new advertising rules. Influencers are also under the scope of the law.
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- If you post a cryptocurrency meme, you may be breaking the law in the UK
- The Financial Conduct Authority (FCA) has warned that the advertising guidelines cover both memes and social media influencers
- Financial advertising, including cryptocurrencies, is strictly regulated in the UK
UK social media users must now be careful about memes and other comments they make online, as even unpaid posts can breach new financial advertising rules.
The UK’s Financial Conduct Authority (FCA) has proposed new guidance on financial promotions stating that some cryptocurrency tokens can break the rules. The regulator issued the guidance in a statement on Monday, also warning that the rules cover social media influencers, even when they don’t get paid.
“We’ve seen memes and other similar communications circulate on social media with users often unaware that they are bound by our rules,” the FCA stated in the statement.
Memes may violate advertising law
The agency noted that promotional memes are particularly prevalent in the cryptocurrency sector, adding that communications of this kind — as well as others — could be considered illegal asset promotion, so their promoters would be required to add disclaimers to comply with the regulations.
The guidance document includes a An example of an incompatible cryptocurrency meme. The image shows two scenarios: At the bottom you can see a person who is conflicted about spending money in the supermarket. Meanwhile, at the bottom, another comparison scenario is shown where a person buys cryptocurrencies with ease.
An example of a meme related to investing in cryptocurrencies that the Financial Conduct Authority (FCA) considers financial promotion. Source: FCA “Companies are reminded that any type of communication can be financial promotion and is subject to S21,” the agency noted, suggesting that many people may not be aware that memes are also subject to the rules.
Breach of Section 21 of the Financial Services and Markets Act 2000 is a criminal offense punishable by up to two years in prison, an unlimited fine, or both, The Block explains. The FCA added that “S21 has broad regional application and is applicable even where the communication originates from outside the UK if it is capable of affecting the UK”.
Updated compliance rules could also be important for memecoin projects, which are digital assets that base much of their value proposition on associated memes. For example (DOGE) and (SHIB), which are inspired by the Shiba Inu puppy meme, are common cases for projects of this type.
Influencers also fall under the regulations
In addition to memes, the UK’s new advertising rules also cover what the regulator has called “finfluencers,” or financial influencers on social media.
In this regard, the FCA said that influencers working on social media platforms such as Reddit, Instagram, and tik tok, They could be unknowingly doing financial promotions and not realizing they are subject to S21 restrictions. The regulator warned that even when they are posting for free, they are within the scope of the new rules and could break the law if they do not have proper prior approval.
The guide cites influencers who are not paid directly by companies, but who post online in hopes of getting hired later or getting more views themselves, as an example, and warns that the lack of evidence of direct compensation or underlying business interest does not excuse them. them to comply with the rules.
The regulator advised influencers to ensure their promotions are fair and not misleading, even if they are memes.
“We have seen money promotional messages sent out in chat rooms such as Reddit and Telegram, and memes are often used to promote specific investments. Users of chat rooms or forums should be aware that financial promotions on these channels will still be subject to financial promotion restrictions.”
Strict regulation of crypto advertising in the UK The UK’s financial authority has tightened its policies on cryptocurrency advertising and published new rules for this activity in June. The rules prohibit the promotion of crypto products through financial incentives such as airdrops (distributions of free tokens) and require clear risk warnings in cryptocurrency advertisements. They also require cryptocurrency companies to obtain prior authorization from the FCA for any advertising promotion.
More on this topic: Unauthorized crypto promoters in the UK could face jail time, FCA warns
Article by Hana Estefania Perez / Daily Bitcoin
Image from Unsplash
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