Spain has announced new rules for cryptocurrency influencers. Starting next month, Spain’s National Securities Market Commission (CNMV) will require individuals and companies to notify it at least 10 days before running any cryptocurrency-related campaigns.
The rules apply to influencers with more than 100,000 subscribers who are paid to promote cryptocurrencies – a practice that has drawn criticism and even lawsuits around the world.
The new rules, which target companies, platforms and influencers that advertise investments in cryptocurrencies, will force, among other things, to warn that investments in cryptocurrencies are not regulated and that the entire amount invested can be lost.
According to document published this Monday (17), any post in Spain that promotes cryptocurrencies must include a disclaimer that reads:
“Cryptocurrency investments are not regulated. They may not be suitable for retail investors and the total amount invested may be lost.”
Fine of BRL 1.8 million in case of non-compliance
The purpose of the cryptocurrency advertising circular is to ensure that advertisers make their content clear and not misleading. At the same time, the Spanish government wants influencers to include warnings associated with reading cryptocurrencies during advertising.
The new rules will come into force from February 17, and in case of non-compliance, those involved can face a fine of up to 300 thousand euros, about 1.8 million reais.
CNMV head Rodrigo Buenaventura believes the new rule will govern cryptocurrency advertising through traditional media and influencers.
“If influencers weren’t covered, there would be a backdoor to avoid regulation. This is new ground, for us and for them, and there will be moments of friction, but that always happens when you bring rules for something that hasn’t been regulated before.”
Scams and processes
As indicated by the CNMV and specified in the published circular, only cryptocurrency advertising will be required to comply with these regulations. That is, “all advertising aimed at investors or potential investors in Spain in which cryptocurrencies are offered, implicitly or explicitly, as an investment object”.
The regulation excludes advertising of certain digital assets, such as non-fungible tokens (NFT). They will be excluded as long as the advertising does not offer expectations that you can earn if they are resold, among other conditions.
Earlier this month, a class-action lawsuit targeted Kim Kardashian, boxer Floyd Mayweather and other influencers for promoting the EthereumMax coin — raising its price dramatically before the asset dropped to near zero.
The CNMV’s new rules won’t stop influencers from promoting cryptocurrencies, but they will allow the agency to keep a closer eye on what exactly is being promoted.
The CNMV said that “any citizen” can report non-compliance with the rule through its online complaints channel.
Investing in cryptocurrencies, they say, “involves risks such as significant losses due to price fluctuations, cyberattacks or custody failures, which can lead to the total loss of what has been invested.”