New warnings from the Australian Securities and Investments Commission (ASIC) on appropriate conduct for financial influencers could have a dramatic impact on the local crypto industry.
ASIC’s recent Information Sheet outlines the traps influencers and the companies that hire them could fall into while wittingly or unwittingly promoting financial products. The penalties for failing to heed ASIC’s warnings could lead to millions of dollars in fines for corporations and up to five years in prison for individuals.
Although it does not specifically mention crypto influencers, the guidelines certainly apply to them as cryptocurrency investing services are seen as financial products. To those financial influencers or ‘finfluencers’ who are not sure whether their brand is in violation of the law, ASIC writes “Think about your content carefully and whether you are providing unlicensed financial services.”
One point of confusion in the new rules concerns exactly what constitutes promotion as opposed to innocuous informing of financial products. Financial blogger from Strong Money Dave Gow wrote on March 29 that “Writing almost anything could influence someone to invest or use any financial product.”
Gow’s assessment is based on the somewhat nebulous distinction ASIC has made between objective facts about a financial product and the way in which influencers may present them. It states:
“If you present factual information in a way that conveys a recommendation that someone should (or should not) invest in that product or class of products, you could breach the law…