The UK’s Financial Conduct Authority (FCA) announced on Friday that it led a global crackdown on unregulated ‘finfluencers’ over the course of this week.
Nine regulators from Australia, Canada, Hong Kong, Italy, United Arab Emirates and UK joined the crackdown.
In the UK, the FCA said its work led to three individuals being arrested by the City of London Police.
Three individuals also had criminal proceedings commenced against them.
On top of this, four ‘finfluencers’ have been invited to talk to the regulator, another seven have had cease and desist letters sent to them, and 50 warning alerts have been published.
SCA joined the ‘finfluencer’ crackdown
Although the Aussie and Italian regulators may be of note, the fact that the UAE’s Securities and Commodities Authority took part in the operation is particularly striking.
Firstly, the regulator announced a new license for so-called ‘finfluencers’ last week. It’s entirely plausible these events are connected.
More importantly, Dubai has become a hub for many IBs and affiliates from the UK and Europe, not just brokers. Because they are based there and have companies registered in the emirate, they have largely been able to put themselves out of European regulatory oversight.
The fact that the FCA and SCA coordinated on this crackdown suggests there may be trouble ahead for that business model.