Memeing Money: UK Targets 'FinFluencers' Using Memes to Shill Crypto

In a bid to crack down on misleading crypto and investment memes, Britain's financial regulator has issued guidelines for financial firms and finfluencers (financial influencers) who make memes about investments and cryptocurrencies.

In a statement, the watchdog emphasised that all financial product marketing, including memes, must be fair, clear and not misleading. This announcement on meme guidelines comes just months after the Financial Conduct Authority (FCA) implemented new regulations on January 8 to establish a more civilised and stable environment for UK crypto firms and traders.

The FCA requires financial social media influencers to obtain approval from an FCA-appointed representative before promoting financial products and services online, including those advertised through memes. "Promotions aren't just about the likes; they're about the law," Lucy Castledine, director of consumer investments at the FCA, said in a statement.

"We will take action against those touting financial products illegally," Castledine added. The top executive believes social media platforms, with their limited character counts, aren't ideal for marketing complex products. She stressed the importance of firms considering whether promoting them on a limited-character platform is truly effective.

In 2022, the FCA removed over 10,000 misleading adverts about financial services. Last year, the financial regulator introduced new rules to safeguard UK consumers from misleading investment opportunities and deceptive ads promoting high-risk assets.

Crypto memes: A form of financial promotion

The regulator noted that cryptocurrency promotions are a hotbed for meme marketing. Digital currency enthusiasts flock to Telegram, a platform teeming with crypto memes, which are also widely shared on discussion boards like Reddit.

The FCA expressed concern about promotions using memes to hype investments in chatrooms like Reddit and Telegram. In a warning issued to chatroom users, the FCA said financial promotions on these platforms remain subject to its regulations.

The FCA has intensified its efforts to combat financial scams, which surged during the COVID-19 pandemic. A CNBC report highlights that many consumers turned to online platforms for banking and investment needs during this unprecedented time.

The FCA ramps up scrutiny

UK social media influencers have been facing scrutiny for promoting crypto. In 2022, reality TV stars Jessica and Eve Gale were sanctioned by regulators for misleading followers with their pro-crypto posts, as per ASA Ruling on Elizabeth O'Donnell.

As part of this move, the FCA has taken a stricter stance on crypto advertising. Since October 2023, UK firms promoting crypto investments to consumers must be FCA-authorised, registered or have their marketing approved by an authorised firm.

The FCA's intensified scrutiny of financial promotions led them to request the removal of over 10,000 misleading social media ads last year, up from 8,500 in 2022. There are no prizes for guessing that ignoring the FCA's guidance can have consequences.

The watchdog requires those promoting paid financial products or unregulated advice online to provide visible risk warnings throughout videos, not just captions, on platforms like TikTok and YouTube. The FCA extends the risk warning requirement to all images within social media posts with multiple photos, like carousels on Instagram.

The FCA noted that consumers must know about online scams and questionable ads. However, it stressed that it is equally crucial for influencers to remain on the "right side of the rules and consider what would happen to their own reputations if they're found to promote products illegally."

This increased scrutiny by the FCA can be attributed to a shift in the number of young people moving away from traditional financial advisors and banks. Platforms like TikTok, known for personal finance trends, present financial tips lightheartedly. As a result, loud budgeting and "my payday routine" videos have become a go-to source for money management advice.

According to Intuit Credit Karma research, the hashtag #FinTok boasts 4.8 billion views on TikTok, reflecting a trend where over a third of Gen Z relies on social media influencers for financial guidance. Interestingly, less than 10 per cent consider traditional financial services providers for guidance.