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Laws may need to be strengthened to crack down on the exploitation of child “influencers”, a senior Labour MP has warned.

Chi Onwurah, chair of the science, technology and innovation committee, said parts of the Online Safety Act – passed in October 2023 – may already be “obsolete or inadequate”.

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Experts have raised concerns that there is a lack of provision in industry laws for children who earn money through brand collaborations on social media when compared to child actors and models.

This has led to some children advertising in their underwear on social media, one expert has claimed.

Those working in more traditional entertainment fields are safeguarded by performance laws, which strictly govern the hours a minor can work, the money they earn and who they are accompanied by.

The Child Influencer Project, which has curated the world’s first industry guidelines for the group, has warned of a “large gap in UK law” which is not sufficiently filled by new online safety legislation.

Official portrait of Chi Onwurah.
Pic: UK Parlimeant
Image:
Official portrait of Chi Onwurah.
Pic: UK Parlimeant

The group’s research found that child influencers could be exposed to as many as 20 different risks of harm, including to dignity, identity, family life, education, and their health and safety.

Ms Onwurah told Sky News there needs to be a “much clearer understanding of the nature of child influencers ‘work’ and the legal and regulatory framework around it”.

She said: “The safety and welfare of children are at the heart of the Online Safety Act and rightly so.

“However, as we know in a number of areas the act may already be obsolete or inadequate due to the lack of foresight and rigour of the last government.”

Victoria Collins, the Liberal Democrat spokesperson for science, innovation and technology, agreed that regulations “need to keep pace with the times”, with child influencers on social media “protected in the same way” as child actors or models.

“Liberal Democrats would welcome steps to strengthen the Online Safety Act on this front,” she added.

‘Something has to be done’

MPs warned in 2022 that the government should “urgently address the gap in UK child labour and performance regulation that is leaving child influencers without protection”.

They asked for new laws on working hours and conditions, a mandate for the protection of the child’s earnings, a right to erasure and to bring child labour arrangements under the oversight of local authorities.

However, Dr Francis Rees, the principal investigator for the Child Influencer Project, told Sky News that even after the implementation of the Online Safety Act, “there’s still a lot wanting”.

“Something has to be done to make brands more aware of their own duty of care towards kids in this arena,” she said.

Dr Rees added that achieving performances from children on social media “can involve extremely coercive and disruptive practices”.

“We simply have to do more to protect these children who have very little say or understanding of what is really happening. Most are left without a voice and without a choice.”

What is a child influencer – and how are they at risk?

A child influencer is a person under the age of 18 who makes money through social media, whether that is using their image alone or with their family.

Dr Francis Rees, principal investigator for the Child Influencer Project, explains this is an “escalation” from the sharing of digital images and performances of the child into “some form of commercial gain or brand endorsement”.

She said issues can emerge when young people work with brands – who do not have to comply with standard practise for a child influencer as they would with an in-house production.

Dr Rees explains how, when working with a child model or actor, an advertising agency would have to make sure a performance license is in place, and make sure “everything is in accordance with many layers of legislation and regulation around child protection”.

But, outside of a professional environment, these safeguards are not in place.

She notes that 30-second videos “can take as long as three days to practice and rehearse”.

And, Dr Rees suggests, this can have a strain on the parent-child relationship.

“It’s just not as simple as taking a child on to a set and having them perform to a camera which professionals are involved in.”

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The researcher pointed to one particular instance, in which children were advertising an underwear brand on social media.

She said: “The kids in the company’s own marketing material or their own media campaigns are either pulling up the band of the underwear underneath their clothing, or they’re holding the underwear up while they’re fully clothed.

“But whenever you look at any of the sponsored content produced by families with children – mum, dad, and child are in their underwear.”

Dr Rees said it is “night and day” in terms of how companies are behaving when they have responsibility for the material, versus “the lack of responsibility once they hand it over to parents with kids”.

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SEC sends warning letters to ETF issuers targeting untamed leverage

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SEC sends warning letters to ETF issuers targeting untamed leverage

The US Securities and Exchange Commission (SEC) sent warning letters to several exchange-traded fund (ETF) providers, halting applications for leveraged ETFs that offer more than 200% exposure to the underlying asset.

ETF issuers Direxion, ProShares, and Tidal received letters from the SEC citing legal provisions under the Investment Company Act of 1940.

The law caps exposure of investment funds at 200% of their value-at-risk, defined by a “reference portfolio” of unleveraged, underlying assets or benchmark indexes. The SEC said:

“The fund’s designated reference portfolio provides the unleveraged baseline against which to compare the fund’s leveraged portfolio for purposes of identifying the fund’s leverage risk under the rule.”

SEC, Ethereum ETF, Bitcoin ETF, ETF
SEC warning letter sent to Direxion. Source: SEC

The SEC directed issuers to reduce the amount of leverage in accordance with the existing regulations before the applications would be considered, putting a damper on 3-5x crypto leveraged ETFs in the US.

SEC regulators posted the warning letters the same day they were sent to the issuer, in an “unusually speedy move” that signals officials are keen on communicating their concerns about leveraged products to the investing public, according to Bloomberg.

The crypto market took a nosedive in October after a flash crash caused $20 billion in leveraged liquidations, the most severe single-day liquidation event in crypto history, sparking discussions among analysts and investors over the dangers of leverage and its effect on the crypto market.