Cryptocurrencies and Influencer Scams: What Does the Law Say?

Cryptocurrencies have become an unavoidable topic in the world of finance and digital technology. They attract investors seeking high returns as well as fraudsters looking to exploit public enthusiasm. In recent years, influencers, prominent figures on social media, have found themselves at the center of several scandals involving cryptocurrency fraud. In the face of these dubious practices, what protections does French law offer?

The Rise of Cryptocurrencies and the Role of Influencers

Cryptocurrencies, such as Bitcoin or Ethereum, are legally classified as “digital assets.” According to Article L. 54-10-1 of the French Monetary and Financial Code, a digital asset is defined as “any digital representation of value that is not issued or guaranteed by a central bank or public authority, that is not necessarily linked to a legal tender currency, and that does not have the legal status of a currency, but that is accepted by natural or legal persons as a medium of exchange and that can be transferred, stored, or exchanged electronically.”

Digital asset service providers (PSAN) are subject to strict regulation in France. They must register with the French Financial Markets Authority (AMF) to carry out certain activities, such as buying and selling digital assets or holding them on behalf of third parties (French Monetary and Financial Code, Art. L 54-10-3).

The AMF publishes a blacklist of unregistered or unauthorized service providers, and these providers are prohibited from advertising electronically.

Cryptocurrencies, such as Bitcoin or Ethereum, offer attractive investment opportunities, but they are also known for their volatility and the absence of centralized regulation. Influencers play a key role in promoting these digital assets, often through paid partnerships with exchange platforms or blockchain projects.

However, some unscrupulous influencers take advantage of their fame to encourage their followers to invest in fraudulent projects, “rug pulls” (projects abandoned after raising funds), or Ponzi schemes disguised behind promises of exceptional returns.

Common Cryptocurrency Scams

Several types of cryptocurrency scams involving influencers have been identified:

Pump and dump: The influencer promotes a little-known cryptocurrency, encouraging their followers to buy it, before massively selling their own tokens for a quick profit, causing the price to collapse.
Fake giveaways: Influencers promise free distributions of cryptocurrencies in exchange for an upfront payment, then disappear with the funds.
Ghost projects: Some influencers create or promote supposedly revolutionary cryptocurrencies, collect funds, and then abandon the project without delivering the promised product.
Fraudulent platforms: Promotion of cryptocurrency investment platforms that turn out to be outright scams.

What Does French Law Say?

In response to the rise of cryptocurrency-related fraud, France has established a strict regulatory framework to protect consumers.

a) Regulation of Influencers

To ensure greater transparency and enhanced understanding among internet users, who may be influenced by an illusion of proximity with influencers, the law strictly regulates the obligation to disclose the promotional nature of their content and the authenticity of the images used.

Since the law of June 9, 2023, aimed at regulating influencers and combating online abuse (formally “Law No. 2023-451 of June 9, 2023, aimed at regulating commercial influence and combating the excesses of influencers on social media”), several provisions apply:

Transparency obligation: Influencers must disclose any paid partnership and any promotion of financial or cryptocurrency products.
Prohibition on promoting certain products: Unregistered influencers are prohibited from promoting cryptocurrency investments without the status of a financial agent registered with the French Financial Markets Authority (AMF): regarding digital assets or digital asset services, promotion is authorized only for advertisers registered with or holding an authorization from the AMF; for initial coin offerings (ICO), promotion is authorized only for advertisers that have obtained an AMF visa.
Penalties: Offending influencers face fines of up to 300,000 euros and prison sentences of up to 2 years (Law Art. 4, IX). The penalties incurred are therefore particularly severe. In addition, the influencer may be subject to a prohibition, whether permanent or temporary, from exercising the professional or social activity in the course of which or on the occasion of which the offense was committed, or from exercising the activity of influencer (Law Art. 4, IX).

A decree is responsible for specifying the implementing procedures for these obligations (Law, Art. 5, V).

Ordinance No. 2024-978 of November 6, 2024 amended Law No. 2023-451 of June 9, 2023 to bring it into compliance with European law and to clarify certain provisions.

However, several provisions of this law still require implementing decrees to become fully effective.

Here is a summary of the main points relating to these decrees or their expected content:

1. Definition and Obligations of Influencers

The law defines influencers as natural or legal persons who, for remuneration, leverage their fame to promote goods, services, or causes to the public by electronic means.
Article 1 of the law was amended by Ordinance No. 2024-978 of November 6, 2024 to specify that the activity of commercial influence by electronic means is carried out by natural or legal persons who, for remuneration, leverage their fame with their audience to communicate content to the public aimed at promoting, directly or indirectly, goods, services, or any cause.
The decrees must specify the thresholds of remuneration or benefits in kind beyond which influencers will be subject to specific obligations, particularly the conclusion of written contracts with their agents or advertisers.

2. Mandatory Disclosures and Transparency

Influencers must clearly display the labels “Advertisement” or “Commercial partnership” on their promotional content, in a legible and identifiable manner, throughout the duration of the promotion. This obligation also applies to content that has been retouched or generated by artificial intelligence, which must include the labels “Retouched images” or “Virtual images.”
The decrees will specify the technical implementation procedures for these mandatory disclosures.
Article 5 of Law No. 2023-451 of June 9, 2023 was revised by Ordinance No. 2024-978 of November 6, 2024 to specify that influencers must clearly indicate the promotional nature of their content by using labels such as “Advertisement” or “Commercial partnership,” or any equivalent label adapted to the characteristics of the influencer activity and the format of the communication medium used.
Furthermore, when images have been retouched or created by artificial intelligence, an explicit label must indicate this, for example “Retouched images” or “Virtual images,” or any appropriate equivalent label.

3. Regulation of Influencer Agents

The activity of influencer agent, which consists of representing influencers in their commercial relationships, is also regulated. The decrees must define the specific obligations of agents, particularly regarding the prevention of conflicts of interest.

4. Liability and Insurance

Influencers established outside the European Union or the European Economic Area (EEA) must designate a legal representative within the EU and take out insurance covering their civil liability for activities targeting a French audience. The decrees will specify the procedures for designating this representative and the conditions for taking out the insurance.
Furthermore, a new Article 5-1 was introduced by Ordinance No. 2024-978 of November 6, 2024 to specify that certain provisions of the law do not apply to persons carrying out commercial influence activities by electronic means who are established in another Member State of the European Union, the Swiss Confederation, or the European Economic Area, in accordance with applicable European directives. Initially, the law applied to all influencers targeting an audience located in France, regardless of their place of residence or establishment. This approach therefore encompassed influencers established both in France and abroad, including those located within the European Economic Area (EEA). However, the European Commission expressed reservations about this territorial scope, considering that it contravened the principles of European directives, particularly the “e-Commerce” Directive and the Audiovisual Media Services (AVMS) Directive. These directives stipulate that the legislation applicable to a service provider is that of the country in which it is established, in accordance with the “country of origin” principle. To comply with European requirements, the ordinance adjusted the territorial scope of the law. Henceforth, certain provisions of the law do not apply to influencers established in another Member State of the EEA, the Swiss Confederation, or the European Union, in accordance with applicable European directives. Thus, an influencer residing in Germany, for example, and addressing a French audience, will be subject to German legislation rather than French law.

5. Specific Prohibitions

The law prohibits the promotion of certain products or services deemed harmful, such as sports betting tips or aesthetic procedures that present health risks.
Article 4 of Law No. 2023-451 of June 9, 2023 was revised by Ordinance No. 2024-978 of November 6, 2024 to prohibit influencers from directly or indirectly promoting the following:
- Aesthetic procedures, processes, techniques, and methods that may present health risks, as mentioned in Article L. 1151-2 of the Public Health Code.
- Non-therapeutic products, procedures, processes, techniques, and methods presented as comparable to, preferable to, or substitutable for therapeutic procedures, protocols, or prescriptions.
- Products containing nicotine that can be consumed and composed, even partially, of nicotine.
- Promotion involving animals not included on the list mentioned in Section I of Article L. 413-1 A of the Environmental Code, except for establishments authorized to hold these animals pursuant to Article L. 413-3 of the same code.

6. Reporting Mechanisms and Cooperation with Platforms

Online platforms must implement mechanisms allowing users to report illegal content, in accordance with the Digital Services Act (DSA). The decrees will specify the procedures for cooperation between platforms and French authorities.

Certain provisions of the law are suspended pending the publication of implementing decrees. According to available information, these decrees should be published by the end of 2025.

b) The Role of the French Financial Markets Authority (AMF) and the DGCCRF

The AMF and the Directorate General for Competition, Consumer Affairs and Fraud Prevention (DGCCRF) play a key role in combating cryptocurrency scams.

The AMF detects illegal offerings and can refer cases to the public prosecutor for criminal proceedings. The AMF has established a blacklist of unauthorized trading platforms in France and regularly calls for vigilance against overly enticing offers. It also requires legitimate platforms to register and comply with strict obligations regarding investor information.

The DGCCRF, for its part, monitors advertising practices and can sanction influencers for non-compliance with transparency rules.

c) Criminal and Civil Penalties

In cases of proven fraud, several articles of the French Penal Code allow for the liability of influencers and promoters of these scams to be engaged:

Fraud (Article 313-1 of the Penal Code): Punishable by 5 years of imprisonment and a fine of 375,000 euros.
Breach of trust (Article 314-1 of the Penal Code): Punishable by 3 years of imprisonment and a fine of 375,000 euros.
Misleading advertising and unfair commercial practices (Article L121-2 of the Consumer Code): May result in financial penalties and prohibitions from practicing. Non-compliance with these obligations may indeed give rise to prosecution on the basis of Articles L. 121-1 and also L. 121-3 of the Consumer Code, which provide that a commercial practice is misleading if, taking into account the limitations inherent to the communication medium used and the surrounding circumstances, it omits, conceals, or provides in an unintelligible, ambiguous, or untimely manner, material information, or when it fails to indicate its true commercial intent when this is not already apparent from the context. Furthermore, under Article L. 121-4 of the same code, commercial practices are deemed misleading when their purpose is either to use editorial content in the media to promote a product or service where the professional has financed such promotion without clearly indicating this in the content or through clearly identifiable images or sounds for the consumer (11), or to falsely claim or give the impression that the professional is not acting for purposes relating to their commercial, industrial, craft, liberal, or agricultural activity, or to falsely present themselves as a consumer (21). These offenses are punishable by two years of imprisonment and a fine of 300,000 euros, with the fine amount potentially increased, in proportion to the advantages derived from the offense, to 10% of average annual turnover, calculated on the last three known annual turnovers as of the date of the offense, or to 50% of the expenditure incurred in carrying out the advertising or practice constituting the offense (Consumer Code, Art. L. 132-2).

How to Protect Yourself?

Investors should adopt a cautious and critical approach to influencer recommendations. Here are some tips:

Verify authorizations: Before investing, ensure that the platform is registered with the AMF.
Never invest solely based on a promotion: Influencers are not always qualified to give financial advice.
Be wary of promises that seem too good to be true: A high and guaranteed return is often a sign of fraud.
Consult reviews and specialized forums: The experiences of other investors can alert you to suspicious practices.

Conclusion

Cryptocurrencies offer interesting opportunities, but they are also fertile ground for scams. The involvement of influencers in these frauds has led France to strengthen its legislative arsenal to protect consumers.

It is up to each individual to remain vigilant, verify sources, and never invest blindly under the influence of social media personalities. Caution is the best weapon against cryptocurrency fraud.