Shalini Nagarajan

Crypto startups, engagement farmers and memecoin fans beware: UK authorities may soon come for crypto memes.&nbsp;



The Financial Conduct Authority (FCA) wants to modernize its rules around online financial product promotions to better enforce compliance on social media. 



Its most recent guidance, published in 2015, doesn’t mention crypto at all. The FCA has now opened a consultation on whether to bring crypto memes under the remit of those official UK rules.



“Firms are reminded that any type of communication is capable of being a financial promotion and subject to S21 [part of the law governing financial promotions],&#8221; the agency said.



&#8220;We have seen memes and other similar communications circulated on social media with users often not realizing they are subject to our rules.&#8221;



This means financial promotion restrictions could extend to memes on platforms like Twitter, Reddit and Telegram. Some projects (memecoins) <a href="https://blockworks.co/news/gensler-memecoin-outperforms-market" target="_blank" rel="noreferrer noopener">base almost their entire value proposition</a> on memes, with the FCA saying promotions featuring memes are &#8220;particularly prevalent&#8221; in crypto.


<div class="wp-block-image">
<figure class="alignright size-large is-resized"><img loading="lazy" decoding="async" src="https://blockworks-co.imgix.net/wp-content/uploads/2023/07/Screen-Shot-2023-07-18-at-11.13.26-1.png?w=1024&amp;h=1024" alt="" class="wp-image-62133" width="479" height="509" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2023/07/Screen-Shot-2023-07-18-at-11.13.26-1.png?w=1144 1144w, https://blockworks-co.imgix.net/wp-content/uploads/2023/07/Screen-Shot-2023-07-18-at-11.13.26-1.png?w=283 283w, https://blockworks-co.imgix.net/wp-content/uploads/2023/07/Screen-Shot-2023-07-18-at-11.13.26-1.png?w=965 965w, https://blockworks-co.imgix.net/wp-content/uploads/2023/07/Screen-Shot-2023-07-18-at-11.13.26-1.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2023/07/Screen-Shot-2023-07-18-at-11.13.26-1.png?w=242 242w, https://blockworks-co.imgix.net/wp-content/uploads/2023/07/Screen-Shot-2023-07-18-at-11.13.26-1.png?w=246 246w, https://blockworks-co.imgix.net/wp-content/uploads/2023/07/Screen-Shot-2023-07-18-at-11.13.26-1.png?w=206 206w, https://blockworks-co.imgix.net/wp-content/uploads/2023/07/Screen-Shot-2023-07-18-at-11.13.26-1.png?w=75 75w" sizes="auto, (max-width: 479px) 100vw, 479px" /><figcaption class="wp-element-caption">Example of a promotional crypto meme from FCA</figcaption></figure></div>


By providing clear guidelines on memes, the FCA aims to prevent misleading or deceptive practices in online promotional activities.



“We want people to stay on the right side of our rules, so we’re updating our guidance to clarify what we expect of firms when marketing financial products online,” said Lucy Castledine, the FCA’s director of consumer investments.&nbsp;



“And for those touting products illegally, we will be taking action against you.&#8221;



The FCA’s posturing comes as part of broader efforts to regulate crypto advertisements targeting UK consumers.



A marketing campaign for memecoin floki inu (<a href="https://blockworks.co/price/floki" target="_blank" rel="noreferrer noopener">FLOKI</a>), which included advertisements across the London Underground, was <a href="https://www.theguardian.com/technology/2022/mar/02/watchdog-bans-floki-inu-cryptocurrency-campaign-on-london-tube-elon-musk" target="_blank" rel="noreferrer noopener">shut down by UK authorities</a> last year.



Earlier this month, the regulatory authority <a href="https://blockworks.co/news/crypto-uk-ads" target="_blank" rel="noreferrer noopener">announced that crypto firms must comply with new advertising rules</a> by Oct. 8, or risk imprisonment or unlimited fines. 



Scrutiny of casual communications in financial promotions is happening outside the UK, too.&nbsp;



In February, a New York federal judge <a href="https://www.theregister.com/2023/02/27/emoji_financial_advice/">ruled</a> that emojis — rocket ships, money bags and stock charts — in promotions for Dapper Labs&#8217; NFT project NBA Top Shots could be financial advice implying potential returns on investment.



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Crypto memes could soon be regulated in the UK

<div id="highlights-block_63073024d0b5d" class="highlights">
 <ul>
 <li>Ben &#8216;BitBoy&#8217; Armstrong had alleged he sustained losses of more than $75,000 after fellow YouTuber &#8216;atozy&#8217; released a critical video</li>
 <li>Atozy raised about $200,000 from the crypto community to support his legal defense</li>
 </ul>
 
</div>



Ben Armstrong — the YouTuber who goes by the name &#8220;BitBoy Crypto&#8221; — <a href="https://cms.blockworks.co/crypto-youtuber-sues-fellow-influencer-who-dubbed-him-shady-dirtbag/" target="_blank" rel="noreferrer noopener">recently sued</a> fellow influencer Erling ‘Atozy’ Mengshoel in a defamation lawsuit.&nbsp;



He’s now apologized that the suit caught public attention, and is dumping the case.



“We are going to drop the lawsuit, 100%,” he said during his regular <a href="https://www.youtube.com/watch?v=0VGmTZWB4RY" target="_blank" rel="noreferrer noopener">livestream</a> on Wednesday. “I&#8217;m sorry this became public.”



Armstrong wanted the matter to be private, disclosing that a previous confidential lawsuit was settled to his preference. “I&#8217;ve had another lawsuit. It was behind closed doors, and it worked out great. Both parties were happy, and it was settled,” he said, without providing further details.&nbsp;



The YouTuber then expressed he hadn’t anticipated the public would find out about the lawsuit, as his &#8220;name is now so big.&#8221; If he did, he wouldn’t have filed it, he said (all lawsuits are <a href="https://connorreporting.com/court-records-proceedings-public/" target="_blank" rel="noreferrer noopener">public record</a>).



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">So, about the <a href="https://twitter.com/Bitboy_Crypto?ref_src=twsrc%5Etfw">@Bitboy_Crypto</a> / <a href="https://twitter.com/atozy?ref_src=twsrc%5Etfw">@atozy</a> lawsuit: It looks like everyone is doing the right thing now. And as I suspected, it seems Ben was mislead by his lawyers who *definitely* should have known better. Yay for happy endings.&mdash; 𝙳𝚊𝚟𝚒𝚍 𝚂𝚌𝚑𝚠𝚊𝚛𝚝𝚣 (@JoelKatz) <a href="https://twitter.com/JoelKatz/status/1562632406829371394?ref_src=twsrc%5Etfw">August 25, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div><figcaption>Ripple chief technology officer David Schwartz has been <a href="https://twitter.com/JoelKatz/status/1562316408301637632" target="_blank" rel="noreferrer noopener">vocal</a> about the lawsuit on Twitter.</figcaption></figure>



His lawsuit filed August 12 was based on a <a href="https://www.youtube.com/watch?v=DibvroDcT88" target="_blank" rel="noreferrer noopener">November 2021 video</a>, in which Atozy describes BitBoy Crypto as “a shady dirtbag who milks his audience for a quick buck rather than giving them genuine advice.” Atozy also slams the YouTuber for hyping a flop token called Pamp and argues he shouldn’t be offering financial advice.



Armstrong alleged he sustained losses over $75,000, and so his claim sought general, compensatory and special damages for defamation. The claim will be walked back now that the case is being dropped.



“Atozy, you’re the winner here. He’s the winner. I’m the loser,” he said.



This isn’t the first time Armstrong planned unsuccessful legal action. After Celsius’ bankruptcy in June, he <a href="https://twitter.com/Bitboy_Crypto/status/1537987628494036994" target="_blank" rel="noreferrer noopener">intended to launch</a> a class-action lawsuit against the lender over its platform-wide withdrawal freeze. Realizing that he once promoted Celsius’ business via his BitBoy Crypto YouTube channel, he dropped the plan.



Armstrong’s lawyers from Krevolin &amp; Horst didn’t return Blockworks’ request for comment by press time.



<h3 class="wp-block-heading">Atozy thanks crypto community for rallying defense against BitBoy</h3>



Atozy <a href="https://www.youtube.com/watch?v=B95xYAfRCtY" target="_blank" rel="noreferrer noopener">uploaded a video</a> titled “I got sued” on Wednesday, in which he defended his comments against BitBoy Crypto. “When the largest crypto channel on YouTube promotes something that turned out to be a scam, that&#8217;s something worth covering,” he said.



He intended to fight the case. But because he didn’t have the money for it, he linked a <a href="https://www.gofundme.com/f/defending-myself-from-bitboys-frivolous-lawsuit?utm_campaign=p_lico+share-sheet&amp;utm_medium=copy_link&amp;utm_source=customer" target="_blank" rel="noreferrer noopener">GoFundMe page</a> to help defend himself against Armstrong’s “frivolous lawsuit.”&nbsp;



As of Thursday, Atozy had received 610 donations worth $53,407 through the campaign. Additionally, seasoned crypto podcaster Cobie <a href="https://twitter.com/crockpot_xyz/status/1562399751747821568" target="_blank" rel="noreferrer noopener">donated</a> USDC worth $100,000.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">He did it 🫡 <a href="https://t.co/6fNpi28dRZ">pic.twitter.com/6fNpi28dRZ</a>&mdash; Crockpot (@crockpot_xyz) <a href="https://twitter.com/crockpot_xyz/status/1562399751747821568?ref_src=twsrc%5Etfw">August 24, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



After Armstrong said the lawsuit would be scrapped, Atozy confirmed he raised about $200,000 in total. He said he would refund donors once it was officially confirmed that the suit would be pulled.&nbsp;



“Thank you guys for saving me,” Atozy said. 



Still, Atozy appears skeptical, <a href="https://twitter.com/atozy/status/1562547774377168897" target="_blank" rel="noreferrer noopener">tweeting</a> late Wednesday: &#8220;If [Armstrong] has really directed his lawyer to dismiss the lawsuit against me he should prove that it&#8217;s happened by posting a copy of the dismissal WITH PREJUDICE of all claims against me.&#8221;



&#8220;I&#8217;m told by my lawyer that if it is not with prejudice he can refile at any time,&#8221; he said.



Updated with additional tweets from Atozy.



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



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