European consumer advocacy group BEUC has filed a complaint with the European Commission and consumer protection authorities, highlighting that major online platforms—including Meta’s Instagram, Alphabet’s YouTube, TikTok, and Twitter—may be enabling misleading advertisements for crypto assets.
The recent legal battles faced by U.S. regulators against crypto platforms like Coinbase and Binance, along with the notable collapse of FTX last year, have intensified concerns about consumer safety in relation to cryptocurrencies like Bitcoin and ether.
Last month, the European Union implemented the Market in Crypto Assets regulation (MiCa), marking a significant move in crafting a regulatory framework for crypto assets.
In its Thursday complaint, BEUC emphasized that the surge of misleading crypto advertisements on social media constitutes unfair commercial practices, putting consumers at risk of losing considerable sums of money.
The organization pointed out that the issue arises from advertising and influencer marketing tactics.
BEUC is urging the Consumer Protection Cooperation Network to demand that these platforms enforce stricter advertising regulations concerning cryptocurrencies and take steps to prevent influencers from disseminating misleading information to consumers.
Moreover, BEUC suggested that the Network should report back to the European Commission regarding the effectiveness of any measures implemented.
The group has also called for collaboration between European consumer authorities and European Supervisory Authorities overseeing financial services, advocating for revised advertising practices to eliminate misleading crypto promotions on these platforms.
Monique Goyens, Director General of BEUC, commented, “While the upcoming Market in Crypto Assets Regulation will provide crucial oversight, it currently does not extend to social media companies that profit from advertising crypto at the potential expense of consumers.” She emphasized, “Our outreach to consumer protection authorities aims to ensure that Instagram, YouTube, TikTok, and Twitter fulfill their responsibilities to guard consumers against crypto scams and deceptive claims.”
Consumer organizations from Denmark, France, Greece, Italy, Lithuania, Portugal, Slovakia, and Spain have also joined in support of BEUC’s complaint.
© Thomson Reuters 2023
