The cryptocurrency investment advertising is already regulated in Spain. However, the supervisor has a few tricks up his sleeve that have generated some uneasiness in the sector. The discretion that the body reserves to point out buts in campaigns of mass outreach, it makes some fear the possibility of a “siege” that is difficult to anticipate.
This is how some actors in the sector who were waiting for the publication of the standard to launch their own promotional campaigns among the general public. Now, they consider that with the circular in hand, they will have to “walk carefully” to avoid setbacks once their plans get under way.
Despite the fact that the requirements established by the supervisor are clear in the rule published this Monday, the point of contention comes with the capacity that the National Securities Market Commission (CNMV) reserves to be able to flag anomalies even in campaigns that are already running even if they had been previously communicated.
While campaigns targeting a potential audience of 100,000 people or more must be previously communicated to the CNMV at least ten business days in advance, the institution does not guarantee its promoters a satisfactory response within that period of time. And the absence of comments in this case will not be synonymous with conformity.
“In no case, the lack of response during the period between the communication and the start of the campaign will imply that the CNMV considers that the campaign complies with all the regulations”, specifies the standard. And sources from the supervisor assure that while the campaign is under way, may require changes and even suspension of some initiative.
The founder and CEO of Eurocoinpay, Herminio Fernández de Blas, regrets that this ambiguity could lead to “an economic loss for the promoter” when its modification or withdrawal is required. And it is that, in addition, what the norm does establish is that cryptocurrency companies must respond to requests from the CNMV within a period not exceeding two days.
In this case, it is even pointed out that the neglect of these requests would constitute a serious infringement punishable by a fine of up to 300,000 euros or double the benefit obtained. Something that could also be applied to the massive campaigns that were underway once the supervisor released these new surveillance powers as of February 17.
Hearings and deadlines
The cause of this point of tension lies in the fact that what the CNMV initially proposed as a prior authorization requirement, in the end is limited to the obligation of advance communication. A change that, however, the supervisor has indicated that “has been one of the most popular comments” formulated from the sector during the two open public consultations on the matter in recent months.
From a recognized Spanish cryptocurrency platform, another factor of uncertainty in the norm is pointed out. This is the fact that the CNMV can subject to prior scrutiny some campaigns which, without being considered “massive in the strict sense”, they are assumed to have a significant impact “on the target audience” to whom they are addressed.
However, the sector points to the possibility of establish fluid communication channels with the supervisor to avoid surprises. In addition, instead of attending to the minimum of anticipation that the norm indicates, an expert in legal questions on crypto assets considers that “opting for do it before the ten statutory days could pay off, and more especially, in these first moments” of application of the circular.
Although the bulk of the sector celebrates the publication of a standard that “we had been waiting for months”, some points are not entirely satisfying. Thus, the eventual placement of a tarpaulin in a town with more than 100,000 inhabitants in an area in which forecasts of real impact cannot be provided, the CNMV could consider that it falls within the scope of massive campaigns.
And here there is also another factor of uncertainty, since the circular gives the supervisory institution the power to raise the minimum audience threshold from which a campaign is considered “massive”. However, regulatory sources have advanced that there is no set schedule to decide on this point and that it will be more a matter of “practice”.
On the other hand, citizens will be able to report suspicious practices of contravening the specifications or ignoring the demands of the supervisor. A formula that had already been operational for the advertising and marketing of other savings and investment products through an anonymous window.
Woonkly’s director of institutional relations, Eneko Knörr, applauds the goal of “monitoring advertising to avoid that people fall into abuse and scams”, but regrets that cryptocurrency service providers are required “more than those who offer with other assets of similar risk”, such as leveraged investment in equities or commodities.
From Eurocoinpay, which is responsible for one of the projects included in the first batch of the sandbox fintech, it is claimed “not to load too much suspected fraud on digital assets”. Instead, believe that “the hawk’s eye must target the fraud niches” in social networks, where false claims of public figures and guaranteed returns are used that “legally constituted companies do not even consider as possible”. And not only that, but also many times they detect quickly thanks to the notice or queries from your customers.
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