Spain Takes Action Against Crypto Ads, Demands Risk Warnings

Cryptocurrency investments always come with risks but most crypto advertisements don’t include them. The National Securities Market Commission in Spain, also known as the CNMV, said in a statement that crypto advertisers must include all the risks that come with crypto investments.

CNMV is Spain’s financial markets regulator and is concerned about the rise of cryptocurrency adoption not only in Spain but around the world. Furthermore, cryptocurrency investments might not be a good option for many retail investors, and including the risks that come with crypto may save the day for many.

Why not regulate and use crypto as legal tender?

Cryptocurrencies, including Bitcoin and Ethereum, are highly volatile and the trading of digital assets should not be given as financial advice. In 2018, the CNMV and the Central Bank of Spain issued a warning about cryptocurrency investments and their sophistication and lack of transparency.

In February 2021, the Central Bank of Spain stated in a joint press statement with CNMV that, “Crypto-assets, including cryptocurrencies and the supporting technology, may galvanize and modernize the financial system in the coming years,” they also warned that the European Union still doesn’t consider them as a legal tender because cryptocurrencies are not backed by any central authority. 

They also added that cryptocurrencies “are not covered by customer protection mechanisms such as the Deposit Guarantee Scheme or the Investor Compensation Scheme.”

CNMV turns up the heat

The CNMV wants crypto ad campaigns to be “clear, balanced, and fair” and must include all the risks i.e. volatility, scams, loss, theft, etc. Moreover, Spain’s market regulator added that they demand cryptocurrency projects report at least 10 days before executing a campaign that might impact 100,000 or more people. This also includes social media influencers with more than 100,000 followers.

In November 2021, Andrés Iniesta told his 25 million followers on Twitter, “I’m learning how to get started with crypto with @binance #BinanceForAll.” Iniesta’s tweet faced a cold reply from the CNMV.

Spain’s markets regulator said, “Hello, @andresiniesta8, crypto assets, being unregulated products, have some relevant risks. It is recommended to read the statement of @CNMV_MEDIA from 9/2/2021 and inform yourself thoroughly before investing in them or recommending others to do so.”

The new rules for crypto advertisements in Spain will take place on Feb 17, 2022.