A guideline for financial influencers and service providers was recently released by Australia regulators. Influencers and firms will be required to follow the guidelines in order to avoid breaking the Corporations Act 2001 (Corporations Act) and misleading the public by marketing unlicensed financial services.
In recent years, regulators have expressed worry over cryptocurrency advertising and influencers. Especially when it comes to commercials that promise unrealistic profits or deceptive ventures.
The Australian Securities and Investments Commission (ASIC) has issued guidelines for financial influencers and service providers who use them in Australia.
The regulatory agency has issued a warning to social media influencers and financial service providers, advising them to ensure that services promoted or delivered do not violate the Corporations Act 2001. (Corporations Act).
Influencers are encouraged to double-check that the services they advocate are licensed in Australia (AFS). They should also make sure that their information is balanced and accurate.
Furthermore, financial service businesses are warned that they may be held liable for the conduct of influencers. According to the rules, firms might face significant fines, while influencers could face up to 5 years in prison.
While the standards do not specifically include cryptocurrencies, it is reasonable to infer that social media crypto influencers would be bound by them.
Notably, some content providers have complained that the standards do not define what constitutes a promotion, claiming that a factual item might be regarded as one.
Regulators have used a variety of strategies to combat what they consider to be deceptive or harmful advertising. The United Kingdom and India are two more countries that have lately issued crypto advertising guidelines.
Meanwhile, the Netherlands has taken a different approach, instructing kids on how to invest in cryptocurrency. The teachings will be delivered in the next months, as stated.
As regulators try to crack down on deceptive crypto advertisements, investors must be skeptical of ventures that promise unrealistic returns with little utility, even if they are endorsed by an influencer. Influencers like Mayweather and Jake Paul, for example, have been linked to rug pulls in the past.
30 May 2023
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