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YouTube, TikTok, Twitter Face Challenge For Misleading Crypto Promotion

WikiBit 2023-06-09 14:39

Abstract:YouTube, TikTok, Twitter Face Challenge For Misleading Crypto Promotion

  • Instagram, YouTube, TikTok, and Twitter may be subject to regulatory action by a consumer organization that filed complaints with the European Commission.

  • The emergence of deceptive marketing for crypto assets on social media platforms, according to the BEUC, is unfair business conduct.

  • It claimed that advertising and influencers were causing considerable damage, including huge financial loss.

BEUC, an umbrella organization of European consumer groups, has filed a complaint with European Union consumer protection regulators, requesting that Instagram, YouTube, TikTok, and Twitter tighten their crypto advertising policies.

According to the organization, an increasing number of adverts promoting crypto assets on social media platforms constitute unfair business behavior, exposing customers to substantial losses.

It was said that this was accomplished via advertising and influencers.

The BEUC encouraged the Consumer Protection Cooperation Network to force internet platforms to implement tougher crypto advertising regulations and to take steps to prevent influencers from deceiving customers.

According to the complaint, national authorities should force social media platforms to strengthen their regulations and prohibit influencers from promoting cryptocurrency. In a statement, Director General Monique Goyens said:

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 and consumers are at a high risk of losing a lot of money without recourse to justice.

This is why 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.

Crypto providers will require a license to advertise throughout the EU under the EUs upcoming Markets in Crypto Assets law, MiCA, and the related Digital Services Act puts further limits on major online platforms.

The actions of US authorities against crypto firms Coinbase and Binance, as well as the bankruptcy of FTX last year, have raised worries about consumer protection in relation to crypto assets such as Bitcoin and Ether.

BEUC said that further precautions are still required under current consumer rules that prohibit unfair business activities since crypto scams may cause significant financial losses.

In principle, national consumer agencies may charge fines on violators of consumer law, but Goyens said that harsher penalties were desired. TikTok committed to complying with EU regulations last year after BEUC protested about concealed marketing and aggressive commercials targeting youngsters.

Despite national authorities attempts to counteract deceptive advertising, the issue remains unsolved. According to the research, there is already a legislative basis for taking European Union-level sanctions (the Unfair Commercial Practices Directive) and a body called the Consumer Protection Coordination Network (CPCN) to lead enforcement.

The report requests that the CPCN request that social media platforms implement stricter conditions in their advertising policies, including a prohibition on influencers promoting crypto products in their terms of service, and that the CPCN submit reports to the European Commission on the effectiveness of the measures put in place.

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