The Financial Conduct Authority (FCA) of the UK has urged citizens not to trust cryptocurrency influencers, as they will not be able to protect their rights in case of loss of invested funds.
The regulator explained that many influencers with large followings on YouTube and TikTok are trying to use the economic crisis for their own ends. They promote various trading trainings and offer to invest in foreign currencies or crypto assets, convincing people that this will significantly improve their financial situation.
The agency cited one of the cryptocurrency traders with over 100,000 followers on Instagram as an example. He frequently cites former US broker Jordan Belfort, who was convicted of securities fraud. What’s more, the trader writes that he managed to make nearly £2 million when he bought bitcoin on a dip and sold it at its peak.
The FCA has warned against trusting the financial advice of others, even if they know them personally. If something goes wrong, be it the collapse of the cryptocurrency exchange rate or the theft of digital assets, the investor will not be able to obtain legal protection and, moreover, turn to his “mentor” with this issue.
Recall that recently the cryptocurrency influencer FatMan decided to arrange a financial literacy test for subscribers. He collected $100,000 worth of bitcoins from them without providing details about the project, and then returned the money in full.
“If you are struggling with the rising cost of living, it is best to seek support from your lender. Always be skeptical of investment advice on social media, do your own research using reliable sources,” the FCA said.
The regulator is already working to include provisions on financial content in the internet safety bill. This means that social media and technology companies will be required to comply with consumer protection regulations. The FCA has previously said that if the UK government expands the authority of the agency, it will be able to more effectively regulate cryptocurrency marketing.
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