The Financial Conduct Authority (FCA), a financial regulator in the United Kingdom, has issued a warning to influencers promoting any memecoin. It also outlines guidelines to protect investors from falling prey to scam projects. The latest guideline comes amid an increasing global interest in memecoins.
FCA is Not Pesimisstic About Memecoins
The FCA explained in its press release that firms and individuals promoting any memecoin must be “fair, clear and not misleading.” It implies that these influencers must inform their audience about the facts so that they can make informed financial decisions.
The financial agency reminded influencers of the importance of receiving an FCA-endorsed approval before promoting any financial product to users. Failure to do so can attract criminal penalties, such as two years imprisonment, an unspecified fine, or both. These penalties can affect their reputation in the public.
Today, celebrities and other notable figures promote several crypto projects through memes, reels, and other means on social platforms like X, Reddit, Discord, and Telegram.
Emphasising the agency’s stance, Lucy Castledine, the FCA’s Director of Consumer Investments, said:
“Any marketing for financial products must be fair, clear and not misleading so consumers can invest, save or borrow with confidence. Promotions aren’t just about the likes, they’re about the law. We will take action against those touting financial products illegally.”
The comments from the British regulator show that it is not pessimistic about memecoins. Rather, its goal, as with previous crypto regulatory efforts, is to downsize the possibility of investors falling victim to dubious and malicious memecoin projects that can rid them of their hard-earned money.
Memecoins’ Recent Explosion
Memecoins are assets created for fun. They essentially have no real-world utility. Following the launch of the first memecoin project called Dogecoin, the memecoin sector has gradually grown into a billion-dollar market. With this surge, some of these crypto assets have begun to have real-world use cases.
According to on-chain data from the price-tracking platform CoinGecko, the memecoin market holds a market capitalisation of over $49 billion. Memecoins like Dogecoin, Shiba Inu, Dogwifhat, and others are topping the chart with billions of dollars in market cap.
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