Crypto firms wishing to market their services and products in Spain now have to follow new rules for their advertisements. The financial regulator in Spain, Comisión Nacional del Mercado de Valores (CNMV), announced new crypto investment ads rules. The rules will become effective from February 17, 2022.
Crypto Ads Must Abide by new Regulations
According to the circular released today, crypto ads must provide sufficient information on the risks of any crypto investments. In addition, such an ad must also be “clear, balanced, and fair.”
Furthermore, advertisers targeting at least 100,000 people must tell CNMV 10 days before releasing such ads. This will allow the regulator to supervise the ad activities. The requirement is for an initial report, and there’s no need for any advance report.
In its circular, the CNMV stated that the rules also apply to influencers. This means that crypto service providers running the ads themselves or using third-party ad providers must follow all the stipulated rules.
Beyond these, the regulator also requires that all crypto ads must contain a snippet that tells the audience that crypto ads are unregulated and a warning that all the money invested may be lost. Lastly, all ads must contain links to additional information.
These comprehensive rules focus solely on crypto-assets advertisements. It’s the first step for regulators as they seek to develop a regulatory framework for the crypto industry. It also represents a step in the right direction for the Spanish regulators.
The Increasing Need for Crypto Regulations
The need to regulate crypto advertising has become more evident after many people fall victim to crypto scams due to ads. By covering even ads by influencers, the regulator will maintain a uniform standard and block all loopholes.
The regulator recently warned legendary footballer Andres Iniesta about the risks of crypto after he posted a promotional tweet about Binance.
Last year, Kim Kardashian and Floyd Mayweather advertised a relatively unknown token, EthereumMax. This led hundreds of thousands of people to buy the token, which has lost about 99% of its value since then. Investors in the asset recently commenced a class action suit against the celebrities for damages for their financial losses.
Apart from Spain, regulators in other countries, especially the United Kingdom and Singapore, have also been strict on crypto ads. UK advertising watchdog, ASA, banned several crypto ads last year for being misleading.