U.K. reins in crypto firms to combat ‘scandal’ of freewheeling finfluencers

Up to 25,000 people a year in the U.K. are illegally promoting financial products or offering financial advice on social media, but none have yet appeared in court, according to the first Treasury Select Committee meeting on the subject of so-called “finfluencers.” Regulated financial services firms must comply with strict guidelines when they promote their products on social media and may be put at risk by unauthorised finfluencers.

The Committee met April 30, the day after the U.K. government announced that the regulator responsible for financial services firms, the Financial Conduct Authority (FCA), will gain new regulatory powers over firms dealing in cryptoassets. “Robust rules around crypto will boost investor confidence, support the growth of Fintech and protect people across the UK,” said Chancellor of the Exchequer Rachel Reeves.

The FCA has now launched an enquiry into finfluencers, so compliance managers should expect more activity in this area. Although some finfluencers promote fraudulent scams, some may advertise genuine investments and products, but are unauthorised to do so and don’t abide by the rules — for example, offering unregulated financial advice or not including legal warnings.