The European Consumer Organization (BEUC) has released a report accusing popular social media platforms, including Instagram, TikTok, Twitter, and YouTube, of enabling scams related to digital assets.
The report highlights the risks associated with cryptocurrencies and emphasizes the role of crypto influencers in misleading consumers, particularly targeting unsuspecting teenagers.
The BEUC urges stricter advertising policies and regulatory enforcement to protect consumers from unfair practices in the crypto space.
The BEUC’s report calls on the European network of national consumer authorities (CPC-Network) to enforce stricter advertising policies on social media platforms.
The organization recommends prohibiting influencers from promoting crypto products and implementing mechanisms to prevent consumers from falling victim to unfair commercial practices.
These measures aim to address the lack of enforcement and dubious practices observed in crypto advertising on popular platforms.
The release of the BEUC report coincides with the EU’s active role in crypto legislation. The recently approved Markets in Crypto Asset (MiCA) legislation seeks to establish clear regulations within the digital assets space, curbing fraudulent activities and fostering innovation.
Expected to be implemented in 2024, the regulations will require firms operating in the 27-country bloc to obtain licenses to issue, trade, and safeguard crypto assets, tokenized assets, and stablecoins.
Social Media Platforms Taking Action: While the BEUC report criticizes social media platforms, some platforms have already taken steps to combat crypto scams.
YouTube, for example, intervened to prevent the promotion of an XRP cryptocurrency scam on a hacked channel. In response to an account hack, YouTube promptly engaged with affected creators to restore access and mitigate potential harm.
However, the number of creators falling victim to similar hacks promoted on social media platforms continues to rise, highlighting the need for ongoing vigilance.