BaFin Issues Warning For Investment Advice And Tips Using Social Media Or Messenger Services

Overview

The German Federal Financial Supervisory Authority (BaFin) on 1o February 2022 published its consumer protection warning to investors relying on investment tips in social media and investment platforms.¹ The BaFin's rationale for publishing its new warnings stem not only from recent action at the EU-level² (see standalone coverage from PwC Legal's EU RegCORE) but specifically in its observations that "many consumers make their investment decisions based on information they find in social media." The increased interest in financial markets grew rapidly during the COVID-19 pandemic. The same is also true in respect of bad actors in traditional but also social-media powered trading activity in traditional financial instruments but equally crypto-assets/currencies.