France licenses TradFi and Crypto influencers

France licenses TradFi and Crypto influencers

Licensing Program for Financial Influencers in France: Enhancing Investor Protection in the Blockchain Industry

French authorities are taking steps to regulate the involvement of influencers in the promotion of financial products, including cryptocurrencies. The Autorité des Marchés Financiers (AMF) and the Autorité de Régulation Professionnelle de la Publicité (ARPP), two French agencies responsible for financial market oversight and advertising regulation respectively, have introduced a licensing program as a means of ensuring responsible and compliant practices in influencer advertisements.

The licensing program is designed to train influencers on best practices related to financial product endorsements, with a particular focus on investor protection. Successful completion of the program will earn participants a non-obligatory “Responsible Influence Certificate,” a designation that has already been issued to over 1,000 influencers since its introduction by the ARPP in 2021.

The scope of the certificate includes influencers operating in financial markets involving stocks, bonds, ETFs, derivatives, investment products, and cryptocurrencies. The certification process consists of a course followed by an exam, where influencers are required to achieve a minimum score of 75% on 25 multiple-choice questions.

Marie-Anne Barbat-Layani, the head of AMF, emphasized the need for tighter regulation in the financial market to protect retail investors from scams that are prevalent in the industry. Barbat-Layani stated, “Protecting retail investors is our top priority. If a publication by an influencer is paid for, the public must be informed. Finance is a highly regulated sector, and investment communications must comply with the rules and be clear, accurate, non-misleading, and balanced. It appears that some influencers are unaware of this.”

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The move to introduce a licensing program for influencers aims to professionalize the field and bring more uniformity to influencer practices. Stephane Martin, the General Manager of ARPP, highlighted the benefits of this initiative, stating that it contributes to the prevention actions of ARPP and provides the necessary education for content creators in their commercial influence activities.

One notable aspect of the blockchain industry is the growing influence of crypto influencers in driving adoption and promoting various products and platforms. However, this trend has also attracted criticism due to a lack of due diligence in assessing the efficiency and regulatory requirements of the platforms they endorse, which has resulted in the loss of investor assets.

In several high-profile cases, influencers have faced legal consequences for their involvement in promoting crypto products. For instance, in June, a TikTok influencer pleaded guilty and was ordered to forfeit $1.2 million worth of Bitcoin (BTC) and other assets. Even celebrities like Kim Kardashian have fallen under the regulatory scrutiny of the Securities and Exchange Commission (SEC) for endorsing an unregistered crypto product, resulting in a fine of $1.26 million. These incidents have prompted regulators to develop new techniques to curb fraudulent practices in influencer marketing.

In the United Kingdom, authorities have warned that fraudulent crypto promotions could lead to a jail term of up to two years and hefty fines. Conversely, in May, the French Senate approved crypto companies hiring social media influencers for product promotions.

The introduction of a licensing program marks a significant development in the blockchain industry, where influencers play a crucial role in shaping public sentiment and driving engagement. By imposing regulatory requirements and offering comprehensive training, the French authorities aim to enhance investor protection and promote responsible advertising practices.

This move not only safeguards investors but also contributes to the overall credibility and stability of the blockchain industry. It sets a precedent for other jurisdictions to consider similar measures to ensure the ethical conduct of influencers and the responsible promotion of financial products, such as cryptocurrencies.

In conclusion, the licensing program for financial influencers in France highlights the increasing efforts by regulators to address the challenges posed by influencer marketing in the blockchain industry. By introducing comprehensive training and certification, French authorities aim to enhance investor protection and foster responsible advertising practices. This initiative not only professionalizes the field but also sets a precedent for regulators worldwide to consider similar measures. Ultimately, such steps promote transparency, credibility, and sustainable growth within the blockchain industry.

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