The Financial Conduct Authority (FCA) has launched a crackdown on social media financial influencers – or “finfluencers” – who may be illegally promoting financial products to young, vulnerable audiences.

In a sweeping enforcement action, the UK’s financial watchdog has called in 20 finfluencers for interviews under caution, wielding its criminal powers to investigate potentially unlawful promotional activities. Additionally, the regulator has issued warnings against 38 social media accounts suspected of containing illegal financial promotions.

The crackdown comes amid growing concern about the vulnerability of young people to financial scams, particularly in the cryptocurrency space.

Research shows that nearly two-thirds (62%) of 18- to 29-year-olds follow social media influencers, with an alarming 74% placing trust in their financial advice. Perhaps most concerningly, nine out of ten young followers report having modified their financial behaviour based on finfluencer recommendations.

“Finfluencers are trusted by the people who follow them, often young and potentially vulnerable people attracted to the lifestyle they flaunt,” warns Steve Smart, Executive Director of Enforcement and Market Oversight at the FCA.

“Finfluencers need to check the products they promote to ensure they are not breaking the law and putting their followers’ livelihoods and life savings at risk.”

However, legal experts are questioning whether criminal prosecution is the most appropriate tool for addressing the issue.

Nicola Hutchinson, Partner at Reeds Solicitors – which is currently representing a finfluencer due to stand trial in 2027 – raises important concerns about the FCA’s approach.

“It is clear that the FCA is committed to bringing its prosecutorial weight to bear in the social media space,” Hutchinson says.

“The section 23 Financial Services & Markets Act 2000 offence – which the FCA has already used to charge other influencers – appears, at first blush, to fit the conduct that it wishes to target: the suggestion being that the promotion of financial products on social media channels amounts to ‘carrying out a regulated activity without authorisation’.”

However, she cautions that “the offence is highly technical in nature and it is legitimate to ask whether the section was intended to, and does, criminalise the targeted conduct.”

Hutchinson suggests the FCA’s strategy might be more about sending a message than securing convictions.

“It might be argued that the FCA’s real intention is to send a loud message to influencers that it is ‘watching’ what they are doing, and that if that message is heard these prosecutions have already achieved their objective, whether or not any convictions follow,” says Hutchinson.

The rise of cryptocurrency-focused content creators has particularly worried regulators, as these unqualified individuals often promote complex financial products to impressionable audiences without proper authorisation or understanding of the risks involved. So-called “pump-and-dump” schemes are especially rife in the space and have left many investors out-of-pocket.

The FCA has already demonstrated its commitment to enforcement by taking action against nine individuals for promoting an unauthorised trading scheme, although it’s unknown whether the action is related to cryptocurrencies.

While the regulator cannot name the individuals currently under investigation, the interviews are being conducted voluntarily under its criminal powers—suggesting the serious nature of the potential violations.

For consumers, particularly those interested in cryptocurrency investments, the FCA strongly recommends checking their warning list before making any investment decisions. The regulator’s InvestSmart resources aim to help individuals make more informed investment choices.

This enforcement action marks a significant escalation in the FCA’s approach to regulating the growing influence of social media personalities in the financial sector. Especially in light of the rising popularity of crypto-related content on platforms like TikTok, Instagram, and YouTube, the regulator appears determined to protect vulnerable investors from potentially harmful financial advice—even if the legal basis for its approach may face future challenges.

“Only time will tell if the FCA is right or its plan backfires,” Hutchinson concludes.

(Photo by Nathan Dumlao)

See also: Ellison gets two years for involvement in FTX crypto scandal

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