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The price of Bitcoin has yet to initiate the anticipated large drop, despite mounting regulatory concerns in the United States. Currently, Bitcoin is hovering around $26,500. Meanwhile, a hostile stance towards cryptocurrencies is not unique to the U.S. The European Consumer Organization (BEUC) has also taken a step targeting cryptocurrencies, even if they have justified concerns in certain areas. So what is the problem, and what awaits investors?
Cryptocurrency Advertisements Under Scrutiny
On June 8, the BEUC lodged a complaint with the European Commission against a number of social media platforms for facilitating deceptive promotion of crypto assets. BEUC, Europe’s largest consumer rights group, claims that deceptive cryptocurrency advertisements on social media, some justifiably so, have instigated a new process.
The BEUC alleges that crypto marketers on popular social platforms like Instagram, YouTube, TikTok, Twitter, and others employ misleading promotional strategies for crypto assets, exposing consumers to serious risks. These “finfluencers” are termed an “important source of information” for a younger audience.
In particular, undisclosed ads pose a significant risk to cryptocurrency investors in our country. Followers are often unaware that certain posts are actually paid promotions because the users who receive the ad space don’t indicate this. As a result, they invest in projects that often cannot fulfill their promises simply because they have been exposed to the advertising.
Restrictions on Cryptocurrency Advertisements
The group says that consumers are not protected by any specific law because crypto assets are not yet regulated under the new Markets in Crypto Assets (MiCA) regulations. The BEUC, serving as an umbrella group for 46 independent consumer organizations from 32 countries, is the largest consumer rights group in Europe.
The consumer rights group has called for the implementation of the Unfair Commercial Practices Directive (UCPD), an existing legal measure in the EU. Moreover, it suggests that the Consumer Protection Cooperation Network (CPCN), in cooperation with European Supervisory Authorities (ESAs) for financial services, could lead enforcement action on this issue.
In March, the World Economic Forum released a report highlighting the popularity of cryptocurrency in EU countries. Slovenia, Croatia, and Luxembourg lead EU countries in terms of cryptocurrency popularity.
