Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Are Finfluencers in Trouble or Just Getting Regulated?
Regulation | June 13, 2025
Image: Freepik/marymarkevich
Regulators Take Action on Unlawful Finfluencers While Advocates Urge Clarity, Fairness and Access
Canadian regulators joined a coordinated global crackdown last week targeting unlawful finfluencers, or social media personalities promoting investments without registration or oversight. While enforcement activity is increasingly in focus, global experts and finfluencer advocates are warning that overly restrictive approaches will harm innovation, reduce access to financial education, and weaken digital financial literacy efforts.
As part of the Global Week of Action Against Unlawful Finfluencers, the Ontario Securities Commission (OSC) collaborated with regulators from the UK, Australia, the United Arab Emirates, Italy, and Hong Kong to investigate unlawful influencer activity.
See: The Finfluencer Effect on Canadian Retail Investors
The OSC reviewed 87 finfluencers and 9 issuers that used influencer promotions, and found some were offering unregistered investment advice or sharing misleading content, especially in the crypto sector. In-person warnings, gathering of evidence, and educational outreach were used to prevent retail investors being harmed.
Bonnie Lysyk, Executive Vice President of Enforcement at the OSC:
“International relationships are vital in countering this growing issue. The OSC’s recent research highlights the substantial influence social media personalities have on investor behaviour.”
Promote Compliance Without Silencing Education
In May 2025, the International Organization of Securities Commissions - IOSCO published its final report on finfluencers, to address online retail investor safety. Both the OSC and IOSCO's research on the impact of finfluencers were aligned, highlighting risks such as gamification and how social media and trading platforms can blur the line between general information and regulated investment advice.
See: Emerging Investors: Gen Z Canadians Take the Lead in Global Investment Trends
IOSCO doesn't advocate for bans but rather outlines a series of good practices for regulators, platforms, market intermediaries, and finfluencers:
- Clear disclosures of paid relationships and risks
- Investor education tools
- Proportionate regulatory responses
- Collaborative oversight frameworks
Jean-Paul Servais, Chair of IOSCO and FSMA Belgium:
“These reports set out globally aligned expectations for ethical conduct and effective oversight... ensuring that technology enhances trust, rather than undermining it,”
Finfluencer Advocate Perspective
Not all creators are breaking the rules. According to the CFA Institute’s 2024 finfluencers appeal report, many finfluencers are filling educational gaps and helping demystify investing and financial planning for younger and underserved audiences. They create digestible and accessible content, often without commercial promotion or investment recommendations. Some are careful to include disclaimers and avoid offering specific advice.
See: A Look Inside 2024 DIY Investing Trends in Canada
A Wealth Professional Canada article cited Tangerine survey that discovered 60% of Canadians who follow finfluencers said they had benefited from their content. At the same time, those who acted on influencer tips were found to be 12 times more likely to experience scams.
Advocates argue that regulation should distinguish between financial education and commercial promotion. They are calling for clarity on how to remain compliant, not for the removal of content that informs and empowers.
“Most of us want to educate and uplift. But we need the rules to be clear and fair, not just fear-based.”
How Canada Compares to Global Peers
While Canada takes a proactive, data driven approach to enforcement of finfluencers while increasing public awareness for finfluencer risks, how do we shape up to our peer countries?
In Australia, the Australian Securities and Investments Commission - ASIC released guidance for social media influencers through INFO 269. ASIC warns that creators discussing financial products may be in breach of the law if they are unlicensed and don't follow compliance standards. The guidance supports financial literacy content as long as it avoids over promotion and includes proper disclosures.
In the United Kingdom, the Financial Conduct Authority (FCA) has focused on financial promotions. The FCA targets firms that pay finfluencers to promote investments without regulatory approval and has updated the financial promotions regime to apply to social media content.
Italy’s CONSOB and other European and Middle Eastern regulators also participated in the coordinated enforcement week. These jurisdictions are enhancing joint oversight of social media investment promotions, especially in the context of crypto and speculative assets.
See: GameStop Testimony: When Short Sellers, Social Media, and Retail Investors Collide
In the United States, regulators such as the SEC and FINRA have pursued enforcement through existing anti-fraud provisions. While there is no finfluencer-specific guidance, recent actions have targeted offside celebrity crypto endorsements and undisclosed paid promotions.
Importantly, none of the major jurisdictions have called for bans, so global consensus is aligning with regulators to build frameworks that promote compliance, transparency, and public awareness instead.
Conclusion
Finfluencers are becoming as influential as traditional advisors, even more so for digitally native and younger investors. So oversight is warranted but the focus should be on compliance that doesn't undermine financial literacy and inclusion. Regulatory consensus shows that with clear rules, good practices, and global cooperation that clear rules and strategic oversight can protect investors while empowering open access to useful financial content online.
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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