Nuthawut Somsuk/Getty Images
- The UK's financial regulator is proposing new rules for social media promotions.
- It specifically highlights memes promoting crypto investment as potential rule-breakers.
- Anyone who fails to outline the risks of such investments could face up to two years in prison.
Crypto memes could break financial promotion rules and land people in prison, the UK's Financial Conduct Authority said Monday.
The regulator is proposing new rules for social media, cracking down on "finfluencers" or financial influencers who promote financial services online.
"We have seen memes and other similar communications circulated on social media with users often not realising they are subject to our rules," the watchdog said in its consultation. "The use of memes in promotions is particularly prevalent in the cryptoasset sector."
The proposed guidelines use an example meme promoting a crypto investment company, that shows a couple in a picture lamenting spending £20 ($26) at the supermarket alongside another image showing a man happily throwing dollar bills into the air that's captioned: "spending £2,000 on crypto."
The FCA says this would breach its rules by failing to outline relevant risks.
It cites a law, section 21 of the Financial Services and Markets Act 2000, which is punishable by up to two years imprisonment, an unlimited fine, or both.
And from October 8, incentives to invest in crypto — such as a bonus for referring a friend — will be banned.
"We've seen a growing number of ads falling short of the guidance we have in place to stop consumer harm," said Lucy Castledine, the FCA's director of consumer Investments.
"We want people to stay on the right side of our rules, so we're updating our guidance to clarify what we expect of firms when marketing financial products online," she added. "And for those touting products illegally, we will be taking action against you."
It follows a joint initiative with the UK's advertising regulator in April, designed to help influencers know which financial promotions are illegal.
"Don't suggest to your followers that cryptoassets would be an easy investment decision or create any sense of urgency or FOMO [fear of missing out]," an infographic on the release explained.