The Australian Securities and Investments Commission has warned financial influencers on TikTok and Instagram that they could face jail time if they provide financial advice without a proper license.
TikTok is home to a range of different influencers, covering all sorts of subject areas, from makeup and fashion to cooking, fitness and more.
There are also a large number of creators who share stock tips and other investment or financial videos with their audience and get thousands or even millions of views for their content.
However, when it comes to viewers’ finances, there are also some legal issues. The Australian Securities and Investments Commission (ASIC) is now warning these content creators could face up to five years in prison if they provide financial advice without a license.
in a (n information sheet issued in March 2022, the ASIC said, “When discussing financial products and services online or promoting affiliate links, make sure you understand your legal obligations.”
This included: “You offer financial product advice or arrange trading in a financial product for your followers. If you operate a financial services business, you must hold an AFS license [Australian Financial Services Licence]”
They added that your content must be “accurate and balanced,” saying, “If your online post is misleading, you may be breaking the law.”
They also listed a number of case studies examining what exactly constitutes financial advice under Australian law and what constitutes misleading information.
President Biden signs executive order
While these regulations are focused on Australia, there are indications that “influencers” around the world, including the US, could soon face similar risks.
In early March, in response to the “explosive growth” of cryptocurrencies in recent years, President Biden signed a new executive order this is a “whole-of-government approach to addressing the risks and reaping the potential benefits of digital assets and their underlying technology.”
@POTUS‘s Order calls for action to:
-Protect consumers, investors and businesses
-Protect the financial stability of the US and the world
-Reducing illegal financing
-Promote equal access
-Support responsible innovation
-Explore a US Federal Reserve digital currency
— The White House (@WhiteHouse) March 9, 2022
In their statement, they also stated, “The rise of digital assets presents an opportunity to reinforce American leadership in the global financial system and at the technological frontier, but also has significant implications for consumer protection, financial stability, national security and climate risk.” “
One of the big concerns about financial influencers, and even just influencers in general, is the risk of pump-and-dump schemes. This is mostly a problem with cryptocurrencies, where an influencer encourages fans to buy a certain crypto coin or asset, only for it to drop in value once early adopters sell.
It’s not clear what this crackdown will have for online financial content creators in the long term, but it looks like the restrictions will only get stricter in the future.
https://www.dexerto.com/entertainment/finance-tiktokers-risk-jail-time-financial-advice-laws-1787773/ Financial and crypto TikTokers risk jail time under financial advisory laws