BEUC, a European consumer organization, has filed a complaint with the EU and national authorities against Instagram, YouTube, TikTok, and Twitter for allowing misleading crypto ads on their platforms.
The group says the ads expose consumers to high financial loss risks and violate consumer laws.
BEUC, representing 45 consumer associations from 32 European countries, has filed a complaint with the European Commission and the Consumer Protection Cooperation Network against four social media platforms: Instagram, YouTube, TikTok, and Twitter.
The complaint accuses the platforms of facilitating the misleading promotion of crypto assets, including Bitcoin, Ethereum, and Dogecoin, through advertising and influencers.
The group says that these ads promise consumers “get rich quick” investments that are too good to be true and that consumers are at a high risk of losing a significant amount of money without recourse to justice.
In addition, the group says these ads constitute an unfair commercial practice, as they breach the platforms’ advertising policies and violate EU consumer laws that prohibit unfair and misleading commerce.
BEUC Director General Monique Goyens said,
“Consumers are increasingly being promised ‘get rich quick’ investments by ads and influencers on social media. Unfortunately, in most cases, these claims are too good to be true, and consumers are at a high risk of losing a lot of money without recourse to justice.”
BEUC’s Demands for Social Media Platforms
BEUC is calling on the authorities to take action against the social media platforms and require them to:
- Adopt stricter advertising policies (and enforce them) on the advertising of crypto assets.
- Adopt measures to prevent influencers from misleading consumers as to the nature of crypto assets.
- Inform the European Commission about the effectiveness of the measures to protect consumers against such practices.
- Cooperate with EU financial regulators to ensure platforms stop promoting misleading crypto ads.
BEUC also points out that the EU plans to regulate crypto assets with the new Markets in Crypto Assets Regulation (MiCA), which will require crypto providers to obtain a license to advertise across the bloc.
However, according to the BEUC, this legislation does not apply to the social media platforms that benefit from crypto advertising at consumers’ expense.
Evidence of Misleading Crypto Ads
BEUC’s report, “Hype or harm? The great social media crypto con”, exposes the misleading crypto ads and influencers on Instagram, YouTube, TikTok, and Twitter.
It gives examples of false or exaggerated claims and deceptive marketing strategies to attract consumers.
The report however, warns of the grave risks and the absence of consumer recourse, transparency, and accountability.
