EU Consumer Group: Social Networks Allowed Misleading Crypto Ads

Europe’s consumer advocacy group says four leading social networks permitted misleading ads for cryptocurrency.

That’s the subject of a complaint filed Thursday (June 8) against Twitter, TikTok, Instagram and YouTube by BEUC and nine of its members.

“These social media companies are responsible for allowing misleading advertisements of crypto assets (‘crypto’) to multiply on their platforms (both through advertising and influencers),” BEUC said in a news release. “This constitutes an unfair commercial practice, as it exposes consumers to serious harm i.e., the loss of significant amounts of money.”

PYMNTS has contacted all four companies for comment. YouTube, Instagram and TikTok have not yet responded. Twitter replied with its standard automatic response to media queries.

BEUC argues that crypto’s “high volatility and speculative nature” makes it a risky investment that is not suitable for many consumers.

“The approach of social media platforms to crypto advertising is very dubious and several of them still insufficiently enforce their internal policies,” the group wrote in “Hype or harm? The great social media crypto con,” a report that accompanied its complaint.

“Our research found ample evidence of misleading promotion for crypto on Instagram, YouTube, TikTok and Twitter despite the social media platforms’ advertising policies.”

Among this evidence: Twitter’s ad policy either prohibits or restricts crypto promotions, but comes with a number of exceptions, as it varies across Europe.

BEUC also argues that Google and Meta — parents and YouTube and Instagram — have advertising policies that impose restrictions on crypto companies but still allow them to publish ads containing “misleading” information.

Joining BEUC were members from Denmark, France, Greece, Italy, Lithuania, Portugal, Slovakia and Spain, the organization said.

The complaint comes weeks after European Union (EU) members gave their final approval to the world’s first comprehensive cryptocurrency regulations, which supporters say have become more crucial in light of cases like the collapse of the FTX exchange.

“Recent events have confirmed the urgent need for imposing rules which will better protect Europeans who have invested in these assets, and prevent the misuse of crypto industry for the purposes of money laundering and financing of terrorism,” Swedish finance minister Elisabeth Svantesson, whose country holds the EU presidency, said in May.

The rules, which are to be rolled out next year, require companies to become licensed if they wish to issue, trade and safeguard crypto assets, tokenized assets and stablecoins in the EU.