Tech Companies and Social Media Platforms Accused of Facilitating Misleading Promotion of Crypto Assets
Tech companies and social media platforms such as Meta, Alphabet, Twitter and TikTok have faced regulatory action after the European Consumer Supervisory Authority complained to the European Commission and consumer protection authorities, accusing the platforms of facilitating misleading promotion of crypto assets.
Concerns about Consumer Protections
U.S. regulators suing crypto platforms Binance and Coinbase, along with the collapse of FTX last year, have raised concerns about consumer protections associated with crypto assets like bitcoin and ether.
Comprehensive Rules for Cryptoasset Regulation
Last month, the European Union adopted the world’s first comprehensive set of rules for the regulation of cryptoassets (MiCa).
Complaints about Misleading Advertisements
Distributing misleading advertisements for cryptoassets on social media platforms is unfair business practice because it exposes consumers to serious harm, such as losing large sums of money, according to a complaint filed by the European Consumer Protection Organization on Thursday in cooperation with nine of its members.
Stricter Advertising Policies
He urged the organization to require platforms to adopt stricter advertising policies regarding encryption and to take action to ensure that influencers do not mislead consumers.
Call to Action for Consumer Protection Authorities
The group called on European consumer protection authorities to work with European financial services regulators to ensure that platforms adapt their advertising policies to prevent misleading promotion of cryptocurrencies.
Legislation Does Not Apply to Social Media Companies
“Cryptocurrencies will soon be regulated by the new Cryptoasset Market Regulation, but this legislation does not apply to social media companies that profit from advertising cryptocurrencies at the expense of consumers,” said Monique Gouvens, CEO of the European Consumer Advocacy Organization in a statement.
Reaching Out to Consumer Protection Authorities
“That’s why we are reaching out to consumer protection authorities to make sure Instagram, YouTube, TikTok and Twitter are up to their responsibilities to protect consumers from cryptocurrency scams and false promises,” she said.
Signed Complaint by Consumer Groups
The complaint was signed by consumer groups in Denmark, France, Greece, Italy, Lithuania, Portugal, Slovakia and Spain.