The International Organization of Securities Commissions (IOSCO) is a body that brings together financial regulatory and supervisory institutions from various countries. One of its objectives is to cooperate to ensure consistent regulatory standards aimed at supporting fair and smooth functioning of financial markets, especially securities markets.

On 12 October 2022, IOSCO published a recommendation to address the increasing risks and challenges arising from the digitalisation of marketing and retail distribution of virtual currencies. The document includes examples of regulations that are to help fight the threats from risky investments, a set of investigatory measures and techniques based on information technology, and a proposal for cooperation between public bodies and providers of electronic intermediary services to effectively identify potential fraud and illegal financial consultancy.

Such electronic intermediary services are offered by ‘finfluencers’, i.e. influencers that make profit on their activity on social media. They are individuals with a committed and dedicated community who advertise, for example, financial products, in particular virtual assets. ‘Finfluencers’ are celebrities, popular actors, musicians, or journalists. With an advertisement using a popular, highly recognised brand, it is easier to reach retail investors and obtain funds. Some influencers have been known to promote pyramid schemes or crypto scams.

The full text of the recommendation is available on IOSCO website: https://www.iosco.org/library/pubdocs/pdf/IOSCOPD715.pdf