Italy's CONSOB Warns Influencers on Cryptocurrency Risk Rules

CONSOB Issues Warning to Financial Influencers on Social Media

The Italian securities regulator, the National Commission for Companies and the Stock Exchange (CONSOB), has released a new informational document from the European Securities and Markets Authority (ESMA) warning financial influencers, referred to as "finfluencers," that European Union rules regarding investment recommendations and advertising fully apply to cryptocurrencies.

In a statement issued on Monday, CONSOB emphasized the importance of the ESMA document, which was published on Thursday. It alerts content creators that "promoting a financial product or service is not the same as promoting shoes or watches." The publication of contracts for difference (CFDs), forex, futures, certain crowdfunding products, and highly volatile cryptocurrencies can lead to total capital losses, and influencers remain legally responsible for what they publish, even if they are not financial professionals.

Additionally, the ESMA document highlights that paid partnerships must be clearly labeled as advertising. Brief statements like "this is not a financial recommendation" do not fulfill regulatory obligations, and providing personalized advice without a license may be deemed a regulated investment recommendation.

The warning for finfluencers underscores ESMA's message to debunk claims of "get rich quick" and to verify that the operators they collaborate with are authorized, to avoid aiding scams in the crypto space.

CONSOB is part of a broader European effort to combat finfluencers, as ESMA first addressed investment recommendations on social media back in 2021, warning that misleading posts and undisclosed conflicts of interest could constitute market abuse or non-compliant investment recommendations.