Lede
Italy’s national securities regulator, the Commissione Nazionale per le Societa e la Borsa (CONSOB), has officially amplified a new factsheet released by the European Securities and Markets Authority (ESMA). This communication serves as a direct warning to social media finance influencers, often referred to as “finfluencers,” regarding their obligations under European Union law. The regulator emphasizes that the promotion of financial products or services is fundamentally different from the marketing of consumer goods such as shoes or watches. This distinction is critical because the promotion of volatile cryptocurrencies, forex, and other complex financial instruments can lead to investors losing 100% of their capital.
The guidance highlights that influencers remain legally responsible for the content they disseminate, even if they are not finance professionals. One of the core requirements outlined in the factsheet is that all paid partnerships must be clearly labeled as advertising. Furthermore, the authorities have clarified that giving personalized investment tips without a license may amount to regulated investment advice. This means that individuals providing specific recommendations on digital platforms may be subject to the same strict regulatory standards as professional investment firms, regardless of their follower count or platform.
Context
The move by CONSOB to amplify these warnings is part of a broader European effort to tighten the net around financial influencers. In 2023, France’s Autorité des marchés financiers, in collaboration with the ARPP, launched a specific initiative known as the Responsible Influence Certificate. This program serves as a training and testing scheme required for influencers who wish to work with ARPP member brands on financial promotions, including cryptocurrency products. This reflects a shift toward formalized training to ensure that digital creators understand the legal consequences of their promotional activities.
The regulatory scrutiny is fueled by high-profile cases where celebrity endorsements led to significant legal repercussions. In 2022, the United States Securities and Exchange Commission fined Kim Kardashian $1.26 million for her role in unlawfully touting EthereumMax (EMAX) tokens on Instagram. She had failed to disclose the payment she received for the promotion. Additionally, in 2023, a class action lawsuit was initiated against a group of individuals described as “FTX influencers.” The lawsuit sought $1 billion in compensation, alleging that these creators misled their followers by promoting products associated with the now-collapsed exchange. These instances demonstrate the potential for massive financial penalties and legal liability when influencers fail to comply with existing advertising and financial disclosure rules.
Impact
The impact of this regulatory stance is profound for the “finfluencer” economy. By explicitly stating that financial promotions are not comparable to marketing shoes or watches, ESMA and CONSOB are demanding a higher level of professional accountability from social media creators. The requirement that paid partnerships must be clearly labeled as advertising removes the ambiguity that has previously characterized social media endorsements. This transparency is intended to protect retail investors from being misled by commercial content disguised as independent advice.
Furthermore, the classification of personalized investment tips as regulated investment advice if delivered without a license could effectively end certain types of content popular on social media. Creators who provide specific strategies or recommendations may now find themselves in direct violation of securities laws if they do not hold the appropriate licensing. This regulatory environment puts pressure on both the influencers and the platforms they use to ensure that “get rich quick” content and volatile crypto promotions are handled with extreme caution. The risk of losing 100% of invested capital in these assets means that regulators are no longer willing to treat social media posts as casual commentary.
Outlook
Looking ahead, the landscape for financial promotion on social media is likely to become increasingly professionalized and restricted. The training and testing scheme established by the Responsible Influence Certificate in France during 2023 provides a potential template for other European nations. As regulators like CONSOB and ESMA continue to align their messaging, the industry may see the widespread adoption of mandatory certifications for anyone wishing to discuss financial products online. This would move the sector away from unregulated hype toward a more compliant and educated influencer base.
The precedent set by the $1.26 million fine against Kim Kardashian in 2022 and the $1 billion seeking class action against FTX influencers in 2023 suggests that legal accountability will remain a primary tool for enforcement. Future regulatory actions are likely to target undisclosed conflicts of interest and misleading claims about “get rich quick” opportunities. Additionally, the outlook for influencers who rely on short disclaimers like “this is not financial advice” is grim; the guidance indicates that such statements do not neutralize an influencer’s regulatory obligations. As the net tightens, the focus will likely remain on preventing scams and ensuring that all financial communication, regardless of the medium, adheres to the same rigorous standards as traditional finance.
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