The National Securities Market Commission (CNMV) wants to keep advertising about cryptocurrencies short. The supervisory body has published this Monday a circular, the first on this matter in Europe, which obliges companies that encourage investment in these unregulated products through massive campaigns —aimed at more than 100,000 people— to request authorization at least 10 days before its execution to guarantee that the information is “clear, balanced, impartial and not misleading”. This measure, which will come into force in a month, will affect commercial messages both on traditional billboards and on the Internet (websites and social networks). They do not escape, therefore, those carried out by influencers.
The exorbitant revaluation registered for years by bitcoin and other virtual currencies —which are not experiencing their best moment now— has given rise to investment in crypto assets among small investors who are not always qualified, encouraged by the promise of succulent returns. These products constitute a growing concern for the CNMV and the Bank of Spain due to the excessive expectations of profits that they can generate and, furthermore, because they are the origin of most of the claims for financial fraud received by the CNMV. An example of the concern they generate was the wake-up call that the market supervisor gave to soccer player Andrés Iniesta in November for announcing on his social networks (38 million followers on Instagram and 25 million on Twitter) the cryptocurrency trading portal Binance.
With the aim of increasing transparency, the supervisor now has new powers to control advertising: “Simple and easy-to-understand language will be used in it and the omission of relevant information or the inclusion of ambiguous, biased, incomplete or contradictory that could lead to confusion”, adds the circular, published this Monday in the Official State Gazette. In all commercial communications, this warning message must be included in a visible place: “Investment in crypto assets is not regulated, may not be suitable for retail investors and the entire amount invested may be lost.”
sanctions
In the event that the campaigns are aimed at more than 100,000 people, their content must also be communicated to the CNMV 10 days in advance. If the rules are broken, it would be a serious infraction and advertisers would face fines of 300,000 euros or double the gross profit obtained as a result of the acts or omissions that constitute the infraction, among other sanctions.
The calls influencers They will also be subject to this regulation when their messages are paid. Unpaid opinions are excluded for freedom of expression, according to CNMV sources. It will also depend on the tone of the message, if it encourages investment in these assets or if it is just corporate advertising. In the case of sponsorships, the same will happen. The regulator will have to review the content of the campaigns one by one to decide. Industry sources point out that supervision can cause delays in the launch of their campaigns —”we will take this factor into account,” they explain—, but they welcome all those who advertise services linked to cryptocurrencies to be governed by the same rules. to stop scams.
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The CNMV has been working on this circular for almost a year, just after a joint statement with the Bank of Spain warned of the “high risk” of these products. Jorge Soriano, CEO of the cryptocurrency trading and savings platform Criptan, explains that they have been adapting to the changes that were coming for some time. “All the campaigns that we have and that we are preparing have been carried out taking into account that people use the cryptos sensibly,” he says. “I also hope that this way we will be allowed to advertise on media such as Instagram, Facebook or Google, where they do not allow us now,” he adds. Technology companies have so far been reluctant to include these ads, but for a few months they have been opening their hand a little to allow them in some cases.
The fact that there is no general regulation on these products in the EU complicates matters. The rule so that cryptoactive services can be provided with legal support, which has already passed the approval of all the Member States, has delayed its effective entry into force until 2024. The latest draft of the MiCA regulation (acronym for markets in crypto-assets) dilates the application for most cryptocurrencies, including bitcoin and the rest of the digital currencies.
Sources from the CNMV have clarified this Monday that the circular does not contain any regulations on the cryptoactives themselves, nor on their suppliers or the services provided on these assets, but exclusively on the requirements that the advertising activity that seeks to offer them as possible must meet. investment. The norm establishes exemptions in cases in which crypto assets are not capable of being invested, such as certain utility tokens, which more than an investment is about coins to use on certain platforms.
The CNMV circular establishes that advertising should avoid making references to high past returns, and if it is made, it should expressly indicate the period of time to which it refers. An interval that should not be less than 12 months. Bitcoin has gone from paying $800 at the end of 2016 to setting a record near $68,000 last November, its highest. This Monday, however, it was at 37,406.31 euros, a sign of the great oscillations of the currency.
Regarding advertising, Criptan’s CEO considers that “it is difficult to assess”, but he does not believe that “nobody has done anything seeking to deceive or generate bad practice”. “Yes, it is true that the advertising part in crypto It has a lot of strategy and the lines are very fine. You have to stay on the side of the regulator, at the same time that you try to promote the ecosystem and make your message known… It is not easy”, he acknowledges.
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