Spain has emerged as a frontrunner in Europe’s race to crackdown on adverts promoting unregulated crypto assets.
Spain’s national securities market commission has been granted powers to oversee the promotion of crypto adverts and today issued guidance on new rules regulating the sector.
The rules require digital asset service providers, including social media influencers who are paid to promote crypto, to notify the watchdog about advertising content and to issue a warning about the risks of investing.
“The aim is to ensure that the advertising of the products offers true, understandable and nonmisleading content, and includes a prominent warning of the
associated risks,” Spain’s CNMV said in a statement. “This is particularly relevant in the field of cryptoassets as the absence of a complete regulation is a challenge for investor protection.”
The watchdog said adverts will be required to include the following warning: “investments in crypto-assets are not regulated. They may not be appropriate for retail investors and the full amount invested may be lost.”
Developments in Spain will likely be watched with interest by European nations considering their own crackdown on crypto asset advertising.
In France, a unit supervised by the finance ministry was given the powers to investigate crypto advertising and a French reality TV star was recently fined €20,000 for “misleading commercial practices” after promoting a Bitcoin trading site on Snapchat.
The UK’s Advertising Standards Agency is pursuing its own campaign against crypto and has banned ads from Arsenal Football Club, Coinbase and Papa John’s Pizza among others amid concerns that investors are being misled by promotions that do not address the risks of investing in digital assets.
The ASA has raised the alarm about digital asset promotions previously told City A.M. that it expects to publish guidance on crypto advertising in the next six months.
“Cryptoassets are a red-alert priority issue for us, so we’re conducting proactive monitoring and interventions where we find issues,” said Miles Lockwood, the director of complaints and investigations for the ASA.
“Consumers need to know about the risks of investing in cryptoassets and companies should make sure that their ads aren’t misleading or socially irresponsible,” he continued.