The Financial Conduct Authority (FCA) of the United Kingdom has published an expansion of the scope of the country's financial promotion rules.
This finalized guidance, released on Tuesday, clarified that all forms of communication, including crypto memes, can constitute financial promotions.
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This announcement builds on the authority's previous statements, indicating that the crypto sector and unpaid influencers might be subject to financial promotion regulations.
The guidance points out:
We’ve seen memes and other similar communications circulated on social media, with users often not realizing they may be subject to our rules. The use of memes in promotions is particularly prevalent in the cryptoasset sector.
Under the FCA's promotions regime, it is mandated that companies can not offer "invitation or inducement to engage in investment activity" unless they are authorized to do so. This rule also applies to influencers who might financially benefit from their posts.
Furthermore, now that the crypto sector is within the FCA's regulatory scope, crypto firms must either register with the FCA or ensure an individual with the necessary credentials approves their advertisements. Moreover, these firms are required to provide clear risk warnings in their marketing.
This guidance is part of the FCA's efforts to enhance consumer protection and market integrity. Last year, the authority also launched an initiative to warn influencers against illegal financial promotions in partnership with Love Island star Sharon Gaffka.
