ESMA Urges Tech Giants to Curb Financial Scams on Social Media

The European Securities and Markets Authority (ESMA) has called on major tech platforms to play a more active role in curbing the spread of unauthorized financial services advertised online. In letters sent to companies including Meta, TikTok, X (formerly Twitter), Alphabet, and others, the EU financial regulator warned of rising risks from digital scams targeting retail investors.

ESMA highlighted a growing trend of fraudulent actors using social media and messaging platforms to promote unlicensed investment opportunities, misleading users and causing potential financial harm. The regulator emphasized that these scams threaten not only individuals but public trust in financial systems.

This effort aligns with a broader international push to address online financial misconduct. Last week, the International Organization of Securities Commissions also launched a campaign targeting harmful digital financial promotions.

In recent months, global regulators have increased oversight of so-called "finfluencers" and unauthorized investment advice online. As part of the shift, the UAE recently became the first in its region to introduce a license for financial influencers, signaling the emergence of a regulatory framework around social media-based financial communications.