The French Government have established a new task force aiming to target and tackle the rise of influencers that seek to capitalise on their audiences through paid promotional sponsorships from crypto firms.
Housed within the Ministere de l’economie (responsible for French economic policy) – the task force will exist as an intra-departmental investigative team comprising agents from L’Autorite des Marches Financiers (AMF – the finance watchdog), la Direction Generale de la concurrence, de la Consommation et de la repression des fraudes (DGCCRF – the competition, consumer, and anti-fraud watchdog).
A spokesman for the AMF was quick to highlight exactly why the watchdog has forwarded agents to contribute towards investigating crypto shilling and scams – and one word quickly summed it up: influencers.
“Social networks and influencers are the new entry point that has appeared in recent years,” confirmed the AMF spokesman.
“In this way, it is a younger audience, from a more modest background than the traditional target of investment scams that is now affected, particularly in the field of trading.
“Influencers often promote highly volatile cryptocurrencies and financial products, and it becomes very difficult for newcomers to anticipate fluctuations.”
Macron administration changes tact on influencers
Indeed, the Macron administration have had a troubled relationship with social media influencer in the past – especially in relation to governing digital spaces – so it is interesting to see a focused effort by authorities to begin active investigation of online promotional opportunities.
In one incident just a few weeks ago, footage emerged of Marlene Schiappa (Minister for Citizenship), alongside a party of leading French influencers – cheerily dancing unmasked and undistanced at a meeting purported to be about awareness for Women’s rights
Français, portez le masque ! Interdit de danser ! Arrêtez les pots ! Stop à la convivialité ! Obéissez ! Sinon amendes, sanctions, contrôles,…
➡️ Pendant ce temps Marlène Schiappa, elle, s’amuse ! ⤵️ pic.twitter.com/18w0kLF9Y3
— Florian Philippot (@f_philippot) December 9, 2021
But the task force could also be connected in part due to the unfettered wealth accrued by French influencers, with their earnings subject to a 3% digital services tax (introduced in 2019). When compared to the high personal-tax rates usually associated with the nation (sitting around 30%), the difference has the potential to become a searing injustice in a Republic proudly founded on notions of Egalite.
‘Finluencers’ be warned
Many influencers have turned ‘finluencer’ (financial influencer) – suckered in doe-eyed by lucrative paid promotion packages – even big names have got involved, Kim Kardashian promoted the ‘Ethereum MAX’ rug pull which brought her under the fire of the British FCA (Ethereum max is now down a whopping 99.99%).
And thousands of retail investors have lost money amid online hype surrounding scam coins – such as Squid Game – that deployed influencer endorsements as a technique for implying project credibility – even tricking outlets such as the BBC into providing coverage.
In one case – cited with inspiring the creation of the new task force, was the successful prosecution of model Nabilla Benattia-Vergara, resulting in a fine back in the summer of €20,000 for the paid promotional content posted on her snapchat story on behalf of a seedy crypto exchange.
With many influencers culpable for their paid shills this year, all eyes will be on the task force to see the efficacy of their efforts in tackling scammers, and pave a road to a more legitimised industry with real retail protections.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.