Cryptocurrencies, social networks and fraud: the dangers of the “finfluencer” business

“Finfluencers”: The term may not mean anything to you, but you’ve surely already come across some if you’re a fan of social networks. A YouTuber who explains which crypto wallet to choose, an Instagramer who deciphers compound interest or a TikToker who promises to reveal his secrets to becoming a millionaire… In recent years, more and more influencers have specialized in finance and finance. In punchy videos or educational posts, they distill their advice on the various social networks to better manage their personal budget and to get rich, or their analyzes on the development of the markets and the latest born in the crypto family. According to a study by HypeAuditor, a platform specializing in influence marketing, the Instagram influencers “finance and economy” category is the one that experienced the fastest growth last year in France (almost 30%), in full Covid epidemic… just ahead for “health and medicine” influencers.

As often, this wave started from the USA, where the main name for “finfluencers” is Austin Hankwitz. Glasses on his nose, casual polo shirt or tie, this 26-year-old former financial analyst now delivers his advice on TikTok and other social networks in collaboration with start-ups and financial companies. According to statements to Bloomberg last year, he would earn more than $500,000 a year from his new business. But France also has its main names, such as Hasheur or Matthieu Louvet.

And behind the most famous names, there are hundreds of other accounts on Instagram, YouTube or TikTok, which see their number of followers increase week after week. “Between January and the beginning of September, my number of subscribers doubled, from 20,000 to 40,000”, testifies Maeva, the creator of the Instagram account “My Budget Bento”, who, apart from her commercial job, has been making presentations for two years about life. insurance, SCPI or wear rate.

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Lack of financial education

“The phenomenon first existed on YouTube, with creators of “historical” content such as Heu?reka, who have long popularized economic and financial topics. But other social networks such as Instagram and TikTok have made it possible to provide more visibility on these topics”, explains Aurélie Balesta, director of operational teams at Influence 4 You, an agency specializing in influence marketing. Above all, the Covid period has taken the attraction of “finfluencers”. Between the boredom of confinement filled by social networks, the desire to regain control of your budget at a time when some saw their income cut by the pandemic, and financial uncertainty in the long term: all the ingredients were there to push more and more people to follow accounts that cause economic and financial problems.

“The rise of financial influencers has been accompanied by the growing interest among young people in the stock market”, notes Claire Castanet, director of relations with savers at the AMF (Financial Markets Authority). The dark world of cryptocurrencies, a source of fascination for many Millennials but requiring the acquisition of sometimes complicated concepts, has also encouraged the emergence of content creators linked to these topics. “It took me a long time to understand before I could make my first investments in cryptocurrencies, so I thought that was the case for most people”, explains Caroline Jurado, influencer specializing in cryptos, who has launched an educational newsletter about topic, read by 49,000 people.

But the appeal of “fine influencer” accounts can also be explained by more structural reasons. “Young people go to these content creators to fill a void: today only 15% of the French have received financial education, while 82% want to invest”, analyzes Matthias Baccino, CEO of France Trade Republic. The new broker is also one of the financial companies that today requests influencers for sponsored posts, such as “French Startupper”, aka Hughes Trijasse, who shares his business tips and his investments in the stock market, cryptocurrencies and real estate, and works also with Boursorama.

“We tried to do it on our own social media accounts, but it doesn’t work so well, despite our thousands of followers,” says Matthias Baccino. “Fintech companies invest a lot in influence marketing and have contributed to the development of the niche of fin influencers, unlike traditional companies in the financial center, which are much more cautious”, emphasizes Quentin Bordage, founder of Kolsquare, a platform which provides companies the opportunity to find the “right” influencers. Finally, the distrust of more traditional media and the eternal lure of easy money promised by certain unscrupulous influencers also strikes a chord with a young population, sometimes gullible, often broken, who also dream of leading the big train.

Fraud risks

Because in the world of “finfluencers”, not all content is created equal. While some are of high quality, others are more problematic and some are even… scams. A hundred subscribers to YouTuber Crytogouv’s account have had the bitter experience of it. For months, the self-proclaimed “investor in cryptocurrencies since 2012” had been hosting a chain of cryptocurrency tutorials. But he didn’t just give advice. At the same time, he also offered some of these followers to create “pools” to invest. Some have invested a few euros, others larger sums. In early July, the YouTuber published a final video to explain to them that it was a scam. Since then he has flown away with 4 million euros…

Other problematic practices are also on the rise. “We have reports of training courses that promise to teach internet users how to become annuitants, which in reality are pyramid schemes: you then have to recruit other people to hope to receive a commission,” explains the DGCCRF (Direction générale of competition, consumption and fraud suppression). “If a person explains to you that they worked hard before they discovered such a training program, but now they want to share their secrets with you, you should be wary”, adds Anne-Claire Bennevault, founder of the platform. training SPAK and BNVLT, a company that advises the financial ecosystem on communication and marketing issues.

“Some influencers may also direct their followers to platforms that are not located in Europe and are not affected by EU rules protecting savers. Without these safeguards, some customers may lose more than their initial investment, and therefore all their savings or end up in debt”, says Claire Castanet. Another scourge, the “copies” of accounts of recognized influencers who thrive. “A lot of fake accounts have been created using my name: they then buy followers and offer fraudulent services to people who follow them,” sighs Hughes Trijasse.

Videos with a catchy title

In addition to fraud, some content can sometimes be problematic when “finfluencers” forget to warn about investment-related risks, flirt with investment advice, a strictly regulated profession in France, or are not completely transparent in their partnerships with brands. According to the latest report from the Responsible Influence Observatory, a study conducted by ARPP, 27% of partnerships are not identified by influencers (in all areas) and 32% of the mention would be “enhancing”. Sometimes problems are associated with lack of knowledge of the rules of this flourishing activity. But also to the type of content that “works” on social networks, catchy and impactful, and to the duration imposed on some of them (30 seconds for example on TikTok), two elements that favor the emergence of content that can discuss.

Caroline Jurado, however, recognized influencer, paid the price last June with a video entitled “Become a millionaire with 300 euros a month”, which made a bad buzz, and for which she received a lot of criticism. “I just wanted to explain the cumulative effects using the example of a company that I like – it wasn’t even a paid partnership – and I had noticed that the most viewed videos were the ones that had a catchy title,” she explains. Since then, the video has been deleted, “and I’m more careful about how I name my content,” she says.

Bercy is working on the file

Faced with this wild west, some social networks have started to tighten the screws. TikTok has banned the promotion of sponsored content related to investment services and cryptocurrencies. And the authorities are trying to bring order. ARPP (Professional Advertising Regulatory Authority) has just launched a version of its certificate for responsible influence, which is specifically aimed at the financial sector, in collaboration with the AMF. “This allows influencers to be trained in basic rules such as transparency or identification of advertising, but also more specific to the financial sector, such as warning of potential risks of loss”, explains Stéphane Martin, general manager of the ‘organization.

Of course, certification is not mandatory, but some companies now require that the influencers they work with hold this sesame. AMF has invested in social networks to carry out an information campaign and send a certain number of messages to the youngest. And the more global file on the risk of influencer excesses – highlighted by this summer’s “clash” between Booba and reality TV influencers, with the latter being accused of fraud by the rapper – is part of what Bercy is working on. In the meantime, industry experts advise being wary of anything remotely resembling investment advice, and always do your own research before blindly following financial advice on social media.

“You also have to differentiate between influencers with pre-existing notoriety, such as those from reality TV who come to cash in on that notoriety by accepting almost anything and everything, and content creators whose only asset is their community and who cannot disappoint them: the level of self-control is just as important”, notes Matthias Baccino. By following these few tips, you may not become a billionaire, but you will avoid leaving all your savings there.


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