The EuropeanConsumer Organization (BEUC) has filed a complaint with the European Commissionand consumer authorities against Instagram, YouTube, TikTok, and Twitter, forfacilitating 'misleading' promotion of cryptocurrencies.
In a report dubbed'Hype or harm? The great social media crypto con', the BEUC blamed the socialmedia platforms for promoting cryptocurrencies using advertisem*nts andinfluencers in what it termed an 'unfair commercial practice' that exposesinvestors to potential losses.
The complaintfollows lawsuits against top cryptocurrency exchanges, Coinbaseand Binance, by the US financial regulators and the collapseof FTX in November last year. The losses suffered from the collapse of the Bahamas-based derivatives exchange are forcing regulators to rethink how to protect investors.
"Consumersare increasingly being promised 'get rich quick' investments by ads and influencerson social media," BEUC's Director General, Monique Goyens, said in the statement. "Unfortunately, in most cases, these claims are too good to betrue, and consumers are at a high risk of losing a lot of money withoutrecourse to justice."
The BEUC is askingthat the network of authorities mandated with enforcing EU consumer protectionlaws, the Consumer Protection Cooperation Network, compel social mediaplatforms to impose strict rules on the advertisem*nt of digital assets. In addition, the European consumer group is pushing for the adoption of measures to preventinfluencers from misleading the public about digital assets on social media. It also wants anassessment by the European Commission on the effectiveness of consumerprotection on social media.
The BEUC further emphasized the need for cooperation between the consumer groups in Europe andthe European Supervisory Authorities to ensure theirpolicies effectively protect consumers against misleading promotions of digitalassets.
The State of EU’sCrypto Rules
According to the EuropeanConsumer Organization,neither the recently adopted European Union's Markets in Crypto-Assets (MiCA) regulation nor the Digital Services Act (DSA), a separate regulation on illegal socialmedia content, protects consumers. The EUpassed MiCA in April as one of the most significant pieces of legislationin the digital asset space.
"Crypto willbe regulated soon with the new Market in Crypto Assets Regulation, but thislegislation does not apply to the social media companies benefiting from theadvertising of crypto at the expense of consumers," Goyens noted. "That is whywe are turning to the authorities in charge of protecting consumers to ensureInstagram, YouTube, TikTok and Twitter fulfil their duty to protect consumersagainst crypto scams and false promises."
BEUC's complaint wasfiled with the support of consumer groups in Denmark, France, Italy, Greece,Lithuania, Portugal, Slovakia, and Spain.
The Ex-CFTC's chair joins Circle; Marqeta shuts Aussie office; read today's news nuggets.
The EuropeanConsumer Organization (BEUC) has filed a complaint with the European Commissionand consumer authorities against Instagram, YouTube, TikTok, and Twitter, forfacilitating 'misleading' promotion of cryptocurrencies.
In a report dubbed'Hype or harm? The great social media crypto con', the BEUC blamed the socialmedia platforms for promoting cryptocurrencies using advertisem*nts andinfluencers in what it termed an 'unfair commercial practice' that exposesinvestors to potential losses.
The complaintfollows lawsuits against top cryptocurrency exchanges, Coinbaseand Binance, by the US financial regulators and the collapseof FTX in November last year. The losses suffered from the collapse of the Bahamas-based derivatives exchange are forcing regulators to rethink how to protect investors.
"Consumersare increasingly being promised 'get rich quick' investments by ads and influencerson social media," BEUC's Director General, Monique Goyens, said in the statement. "Unfortunately, in most cases, these claims are too good to betrue, and consumers are at a high risk of losing a lot of money withoutrecourse to justice."
The BEUC is askingthat the network of authorities mandated with enforcing EU consumer protectionlaws, the Consumer Protection Cooperation Network, compel social mediaplatforms to impose strict rules on the advertisem*nt of digital assets. In addition, the European consumer group is pushing for the adoption of measures to preventinfluencers from misleading the public about digital assets on social media. It also wants anassessment by the European Commission on the effectiveness of consumerprotection on social media.
The BEUC further emphasized the need for cooperation between the consumer groups in Europe andthe European Supervisory Authorities to ensure theirpolicies effectively protect consumers against misleading promotions of digitalassets.
The State of EU’sCrypto Rules
According to the EuropeanConsumer Organization,neither the recently adopted European Union's Markets in Crypto-Assets (MiCA) regulation nor the Digital Services Act (DSA), a separate regulation on illegal socialmedia content, protects consumers. The EUpassed MiCA in April as one of the most significant pieces of legislationin the digital asset space.
"Crypto willbe regulated soon with the new Market in Crypto Assets Regulation, but thislegislation does not apply to the social media companies benefiting from theadvertising of crypto at the expense of consumers," Goyens noted. "That is whywe are turning to the authorities in charge of protecting consumers to ensureInstagram, YouTube, TikTok and Twitter fulfil their duty to protect consumersagainst crypto scams and false promises."
BEUC's complaint wasfiled with the support of consumer groups in Denmark, France, Italy, Greece,Lithuania, Portugal, Slovakia, and Spain.
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The Ex-CFTC's chair joins Circle; Marqeta shuts Aussie office; read today's news nuggets.
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