European consumer group BEUC has lodged a complaint with the European Commission and consumer authorities. The group has contended that online social media platforms like Instagram, YouTube, TikTok, and Twitter are fostering the misleading promotion of crypto assets. In effect, these platforms could face regulatory action.
Instagram, YouTube, TikTok and Twitter could face regulatory action after European consumer group BEUC complained to the European Commission and consumer authorities that the online platforms allegedly facilitate the misleading promotion of crypto assets https://t.co/MAoD5cXbSu pic.twitter.com/nPcH2GqVRs— Reuters (@Reuters) June 8, 2023
Also Read: Crypto: U.S. CFTC Looking to Change Risk Rules
According to the BEUC, portraying misleading advertisements of crypto assets on social media apps is an unfair commercial practice. More so, because this exposes consumers to several risks, including the loss of funds.
The group prompted the Consumer Protection Cooperation Network to ensure that these social media companies adopt stricter advertising policies w.r.t. crypto. Additionally, BEUC also wants Instagram, YouTube, TikTok, and Twitter to take measures to ward off influencers from deceiving consumers.
Furthermore, BEUC said in its joint complaint with nine of its members that the Network should in-turn inform the European Commission about the effectiveness of these measures. Notably, groups in Greece, Italy, Denmark, France, Lithuania, Portugal, Spain, and Slovakia also signed up to the complaint.
Platforms Benefit from Crypto Advertising at Customers’ Expense: BEUC Director General
The U.S. SEC recently filed two back to back lawsuits against Binance and Coinbase. These developments, when coupled with the collapse of companies like FTX last year, have managed to stir-in fear in the minds of investors. Consequentially, authorities around the world have been at the forefront and are tightening regulatory screws.
Commenting on why the latest complaint was filed, BEUC Director General Monique Goyens said in a statement,
“Crypto will be regulated soon with the new Market in Crypto Assets Regulation but this legislation does not apply to the social media companies benefiting from the advertising of crypto at the expense of consumers.”
“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.”