The news just keeps getting worse for crypto this week. It’s now been announced today that the BEUC and nine of its members – Denmark, France, Greece, Italy, Lithuania, Portugal, Slovakia and Spain – have filed a complaint with the European Commission and consumer authorities against Instagram, YouTube, TikTok and Twitter for “facilitating the misleading promotion of crypto assets”.
Their 20-page Hype or harm? The great social media crypto con report targets misleading promotion of crypto on Instagram, YouTube, TikTok and Twitter, even as they contravene the platforms’ own advertising policies.
They add: “Online platforms, and more specifically social media platforms like Instagram, YouTube, TikTok and Twitter have become key players when it comes to advertising crypto. They enable advertisers and traders to publish and promote their ads and to reach out to wide audiences in an unprecedented way.
“They also provide advertisers and traders with the technical tools to target very specific audiences, including teenagers. The approach of social media platforms to crypto advertising is very dubious and several of them still insufficiently enforce their internal policies. Our research found ample evidence of misleading promotion for crypto on Instagram, YouTube, TikTok and Twitter despite the social media platforms’ advertising policies.”
Honing in on Twitter, they said: “Twitter’s advertising policy either prohibits or restricts the promotion of crypto globally. However, this comes with many exceptions. For instance, Twitter’s policy varies across European countries: in some EU Member States, advertisements for financial services and related content are permitted with prior authorisation from Twitter based on unknown criteria and justifications.
“In April 2023, Twitter CEO Elon Musk advertised the logo of the crypto-asset Dogecoin on Twitter, which triggered a 30% increase in its value within a few hours. This again contributes to create a positive perception of crypto among consumers and prevents them from clearly understanding the risks associated with them. This also clearly shows that social media platforms fail to comply with their duty of professional diligence stemming from the Unfair Commercial Practices Directive.”
The report goes into further detail on the other biggest social media platforms on the market. Its legal analysis adds: “In the EU, crypto assets are expected to be soon regulated under the new Market in Crypto Assets (MiCA) Regulation. This will be a promising and an important step.
“However, at this stage, this new law is not in place, and several years will still be needed before it actually comes into force. This means that consumers are today not protected by specific sectoral legislation. This also means that there are no sector-specific restrictions about how and where these products can be promoted and advertised.”