The European Consumer Group (BEUC) complained to the European Commission about Instagram, YouTube, TikTok, and Twitter allowing the promotion of misleading crypto assets on their platforms, which exposed many users to losing money.
The consumer group claimed that there are a large number of advertisements that promote crypto assets on these four social media platforms, leading to unfair commercial practices. Users who fall for these ads may lose significant amounts of money as a result.
The main promoters of these ads are influencers and typical ad placement throughout the user feed. The BEUC wants the Consumer Protection Cooperation Network to force these platforms to impose stricter regulations regarding crypto advertisements.
They also want the platforms to prevent influencers from promoting scammy and misleading crypto assets to their consumers. Lastly, the platforms should be forced to report to the European Commission the effectiveness of these measures.
The BEUC director-general Monique Goyens said in a statement that “Crypto will be regulated soon, with the new Market in Crypto Assets Regulation but this legislation does not apply to the social media company benefiting from the advertising of crypto at the expense of consumers.“
She’s referring to the recent actions against platforms like Binance and Coinbase by US regulators. Last year’s catastrophic collapse of FTX led to even more skepticism and worries about consumer protection regarding crypto assets.
She also said that “This is why we are turning to the authorities in charge of protecting consumers to ensure Instagram, YouTube, TikTok and Twitter fulfill their duty to protect consumers against crypto scams and false promises.”
This joint complaint was spearheaded by consumer groups from Greece, France, Lithuania, Denmark, Slovakia, Italy, Portugal, and Spain.
They asked the European Consumer Authorities to cooperate with the relevant financial supervisory authorities to make sure that social media platforms will keep to their word and impose stricter regulations for crypto advertisements.
