‘Toxic cocktail’: EU watchdog calls out Instagram and TikTok for enabling crypto scams

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Scammers are using social media to push cryptocurrency rackets? Tell us something we didn’t already know. Despite this, the European Consumer Organization (BEUC) and nine of its member organizations have issued a stark warning to European authorities regarding the misleading promotion of cryptocurrency on major social media platforms.

Beginning with a Dogecoin meme, the watchdog group’s 20-page report roundly denounces digital assets as highly risky and prone to scams. It outlines the effect digital assets have on consumers, offering quantitative data on its usage across multiple countries, as well as how crypto influencers operate.

In the report, Instagram, Twitter, YouTube and TikTok are specifically cited, with the group calling the combination of social media networks, influencers and an atoxic cocktail of cryptocurrency. The group says the networks’ loose policies are questionable and that scammers tend to target unsuspecting teenagers. It also highlights the role of finfluencers who make promises that are just too good to be true.

BEUC is a group of 45 independent consumer organizations in 31 countries. According to its website, the aim is to represent these institutions within the European Union (EU) and to defend the interests of consumers. Among the group’s interests are sustainability, financial services, healthcare and international business.

Monique Goyens, Chief Executive of BEUC, said in a press release that it is well documented that promoting crypto involves scams and unfair business practices.

“Crypto will soon be regulated with the new Markets in Crypto Assets regulation, but this legislation does not apply to social media companies profiting from crypto advertising at the expense of consumers,” she added, according to Reuters. .

According to BEUC, European consumer protection laws have been breached and calls on the European Network of National Consumer Protection Authorities (CPC-Network) to act and enforce stricter advertising policies on these platforms.

Despite today’s scathing report, European authorities have already worked to counter crypto scams. Ironically, they took to social media in 2022 with educational campaigns educating investors about the asset class.

The European Union has been at the forefront of crypto legislation, approving the Crypto Asset Markets (MiCA) legislation earlier this year, which aims to end the so-called Wild West mentality. of the digital asset space.

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