Can France’s Pending Social Media Crypto Ban Be Enforced?

Recently, French lawmakers proposed an amendment to Bill 790 that would criminalize the promotion of crypto on social media. The amendment proposes a prison sentence of two years and a fine of €30,000 ($32,600) for violators.

The bill comes at a time when cryptocurrency investments are growing in popularity and could potentially put people at risk. After all, investing in crypto is risky, especially if you don’t do the research yourself.

Technologists and VCs have hailed cryptocurrency and its associated technologies for their potential to change how we handle financial transactions. But there are also concerns about the high volatility and lack of regulation in many countries. France’s ban seeks to address these concerns by blocking exposure to crypto-related risks without adequate due diligence or oversight.

A rationale for the change?

The proposed amendment does not specifically target crypto. It also includes banning influencers from promoting health products, gambling and video games through their social channels. However, given the heated relationship between world governments and crypto, it is necessary to understand the need for this change.

In the past year, several social media influencers received fines for misleading followers.

The SEC accused Kim Kardashian of promoting EthereumMax without disclosing that the company paid her for the promotion. Logan Paul was sued for encouraging followers to buy into the Web3 game CryptoZoo, which turned into a cover-up. Incidents like these show that regulators need to take steps to protect the public.

But is a ban on advertising cryptocurrencies on social media the answer? And in a global world, is such a ban even viable?

To be clear, the bill does not prohibit the marketing of all crypto-assets, only those that are not licensed. The downside is that currently not a single crypto-based company in France has one. In addition, the hurdles involved in obtaining permission from the Autorité des Marchés Financiers, the country’s market regulator, remain unclear.

Disadvantages of a complete ban

The crypto industry is growing faster than ever, with very little sign of slowing down, even during the current bear market. France’s ban, even if well-intentioned, can only stifle their own interests.

As with big tech, crypto companies will move to places with more welcoming laws and tax breaks. And influencers will either move out of the country or continue to post what they want through proxy.

Before moving forward, French leaders should ask themselves whether there might be a better way to combat misleading online content. Media distinguish between news stories and sponsored content. And many crypto media companies and newsletters clearly state that their content is not financial advice.

Perhaps a similar approach could help people distinguish between ads and organic content. Then France need not lose its reputation as a technology- and innovation-friendly place to do business.