Influencers who promote scams, including those which use crypto-assets as payment rails or which involve crypto-asset investments, will face increased scrutiny and possible penalties in the wake of a number of high-profile cases in France, as the country seeks to tackle losses.
France has seen a number of scams emerge in recent which have been promoted heavily by influencers including:
"Crypto Gouv" who scammed nearly 300 people and took more than 4M euro;
Fake employment courses being advertised to job seekers;
The Animoon NFT sale which was called a $6.3M "rug" and is now the subject of a class action lawsuit"
An influencer who was posting "copy trading" suggestions online which are alleged to have traversed into the giving of financial advice; and
Influencers advertising products which are never delivered or which don't meet French standards (including a shampoo that makes users hair fall out!).
It will now be a crime in France to promote scams, with influencers facing up to two years in jail and steep fines. Last year in Australia, ASIC called in a number of "finfluencers" to read them the riot act over online posts which ASIC believed may have involved the giving of financial advice, and released guidelines to influence finfluencers towards a safer path. Australia already has some of the strongest consumer protection laws in the world with the Australian Consumer Law prohibiting misleading and deceptive conduct and the ASIC Act prohibits the same in relation to financial product and services.
Data showing that an increasing number of people are turning to social media for financial advice:
Chainalysis has reported that illicit crypto usage reached all time highs in 2022 in dollar terms, but continues to be extremely small (0.22% of volume, that's right: 1/5th of one percent), which is to be expected as a system like crypto-assets grow. Despite these facts, the narrative of crypto-scams has historically focused on the 'crypto' rather than how victims were lured into scams in the first place.
A targeting of the "on-ramp" and the advertising of scams by influencers, as well as social media and online search advertising, may well prove to be an effective prevention of scams starting, and coupled with the high standards many crypto-exchanges are deploying to help block known scam wallet addresses, should help increase consumer protection while not introducing unnecessary friction over how the general public spend their own money.
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