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The British financial regulation body, the Financial Conduct Authority (FCA), recently disclosed proposed guidelines indicating that crypto-related memes might fall under the umbrella of financial promotions. As a result, crypto businesses and influencers could soon be required to append disclaimers to such memes to comply with the nation's advertising regulations.
The FCA unveiled this proposal on July 17, targeting the rapidly growing influence of social media on financial promotions, notably memes and financial influencers. The regulator pointed out that some meme content produced by crypto firms, circulated online, falls within the purview of its promotional regulations, a fact unknown to many.
Memes, especially those related to cryptocurrencies, often serve as a mode of communication for financial promotions, a trend the FCA aims to clarify. It is renewing its 2015 guidelines to lay out its expectations concerning how marketers should adhere to promotional rules. The FCA also highlighted the potential legal repercussions of violating these standards, which might include a two-year prison term, an indefinite fine, or both.
This regulation is not just for domestic promotions; it extends to international advertisements that could impact the UK. The FCA's intent to update these guidelines arises from a reported surge in the influence of social media personalities, particularly among younger demographics. Reports suggest that over 60% of young adults between 18 and 29 follow these influencers, with 75% expressing trust in their recommendations.
An FCA survey from 2021 also lends weight to this data, revealing that 58% of respondents under 40 years attributed their investment decisions in potentially risky products to the hype generated on social media and in news outlets.
The reach and impact of memes are becoming an increasingly important factor in shaping public opinion and investment trends. The FCA's move to include them under financial promotions could fundamentally alter the landscape of online financial communication.
