IOSCO demands stricter control of "finfluencers"

The International Organization of Securities Commissions has proposed a set of new measures to address the growing risks of digital marketing.

The board of directors of the International Organization of Securities Commissions (IOSCO) believes that regulators at the national and international level need more power to deal with the growing risks and challenges associated with the "digitalization of marketing and retail distribution".

In a report published on October 12, IOSCO offers measures for its member countries to consider when determining their policy and approaches to the application of online retail offers and marketing , given the new challenges that arise with the proliferation of crypto assets.

Talking about these risks, the report focuses on the use of behavioral and gamification techniques and pays particular attention to influencers who engage in crypto marketing, calling them “finfluencers.” Another concept cited by the report is "digital veil". According to IOSCO Secretary General Martin Moloney:

"Digital fraudsters can hide behind a 'digital veil' that makes it difficult for regulators to locate, identify and take action against them."

The measures themselves are not new. IOSCO proposes to require crypto product management to take responsibility for the accuracy of information provided to potential investors on social media and to apply "appropriate filtering mechanisms" for financial consumer onboarding.

The set of oversight capabilities that IOSCO recommends national regulators acquire includes regulatory channels to flag consumer complaints for misleading and illegal promotions and evidence tracking processes to deal with the rapid pace and the changing nature of online information.

More intriguing is the possible legal requirement for crypto firms to have specific staff qualifications and licensing requirements for online marketing personnel, which IOSCO also suggests.

Another proposed measure is compliance with third country regulations: when providing its services to foreign customers, the company should consider whether it could have obtained permission to do so in the country of origin of the customer.

IOSCO has given more attention to crypto this year. In March...