The Financial Conduct Authority (FCA) in the UK has declared its intention to address meme-based marketing for financial products by releasing guidelines for financial services firms and social media influencers.
The FCA’s latest report comes after its announcement last month that it will take action against firms engaged in illegal financial promotions.
FCA Releases Guidelines for Memecoin Influencers
The United Kingdom’s financial regulator has released guidelines for financial services companies and influencers on social media who create memes related to cryptocurrencies or other investments. The guidelines emphasize that any marketing should be transparent and not misleading.
According to the FCA, the “finfluencers,” must obtain approval from an FCA-appointed representative before advertising or posting memes about financial products and services. The regulator warns that promoting a financial product without such approval could constitute a criminal offense.
The FCA stresses consumer vigilance against misleading adverts and scams online. It advises influencers to ensure compliance with regulations and consider the potential impact on their reputations if they are found promoting products illegally.
According to Lucy Castledine, the FCA’s director of consumer investments, the watchdog will take action against those illegally promoting financial products.
The FCA further highlighted that meme-based promotion is particularly popular in the crypto sector, which includes a dedicated niche for such assets. Platforms like Telegram and Reddit have been identified as popular platforms for cryptocurrency-related memetic marketing.
FCA’s Warning Echoes Earlier Proposed Guidelines
The recent warning from the Financial Conduct Authority (FCA) regarding crypto memes is not the first of its kind. In July 2023, the regulator proposed guidelines addressing non-compliant crypto memes, considering financial promotions, with much of the language in this warning aligning with the recent one.
In 2023, the FCA expressed its intention to modernize its rules concerning online financial product promotions to ensure better compliance on social media platforms. Notably, the guidance published by the FCA in 2015 did not mention crypto. As part of this effort, the FCA initiated a consultation on whether to include crypto memes under the scope of official UK rules.
The agency emphasized that any form of communication could be classified as a financial promotion subject to Section 21 of the law governing financial promotions. Lucy Castledine, the FCA’s director of consumer investments, stated during the announcement that they aim to clarify what is expected of firms when marketing financial products online to ensure compliance with their rules.
Meanwhile, the FCA has intensified its scrutiny of financial promotions, removing over 10,000 misleading adverts last year, compared to around 8,500 in 2022. The regulator also issued 450 alerts in 3 months on crypto promotions between October and December 2023.
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