Italy and crypto regulation over marketing

Crypto regulation in terms of influencer marketing

Steph Curry, Tom Brady, and Kim Kardashian are just some of the celebrities who have recently advertised crypto, NFT, or exchanges on their social profiles or through other channels. The use of celebrities and artists as part of crypto marketing operations has now become an industry practice.

The strategy is adopted by both larger companies and start-ups, which often use influencer marketing as a form of promoting their projects through traditional social channels. However, some of these celebrities have had significant problems with industry authorities, particularly in the United States, due to the enforcement of regulation regarding the marketing of financial instruments or products.

Crypto regulation on Financial instruments and marketing

From a regulatory perspective, in Italy the issue of online marketing becomes relevant when tokens offered on a platform take the form (or can take the form) of financial products or instruments. In this case, compliance with a series of obligations and restrictions is required with regard to offering via remote means of communication, thus including the Internet.

Supervision of this activity is entrusted to CONSOB, which also has the task of prosecuting any activities of unlawful offering of products or financial instruments through remote means of communication.

At the same time, the regulations specify that mere advertising does not constitute offering via means of distance communication and, therefore, is not subject to the limitations summarized above.

Promotion of crypto assets and MiCA

The Regulation on Crypto Markets (so-called MiCA), at least in its latest draft, also regulates marketing activities related to cryptoasset offerings. Specifically, the MiCA provisions require that the information provided in the context of promotional activities be fair, clear and not misleading, and that it be consistent with that contained in the white paper related to the product offered.

The above was reiterated and confirmed by the European Commission in a recent response provided following the written question submitted in the context of the debate held by the European Parliament on the proposed regulation (Question E-004040/2022).

Indeed, the Commission recalled that the provisions of MiCA are sufficiently broad to encompass within its scope conduct that may be perceived as advertising, promoting or marketing crypto. MiCA also empowers supervisors to oversee crypto marketing operations.

Crypto promotion service

In answering the aforementioned question, the European Commission also recalls the rules on the “crypto placement service”, recalling that this service is defined as

“the marketing, on behalf of or in the interest of the offeror or a party related to the offeror, of crypto to buyers.” 

The crypto placement service is brought under the umbrella of regulated services under the MiCA. The consequence is the obligation for those who carry out crypto placement not only to comply with the rules regarding the manner of placement, but also to obtain a license under the provisions of MiCA.

Precautions required in influencer marketing activity

The application of the rules on offering by means of remote communication techniques of financial products or instruments, as well as in the future obtaining authorization under the MiCA, is an important and particularly onerous consequence for those who, as creators or influencers, intend to carry out advertising or promotional activities with respect to crypto or platforms specializing in its trading.

On the other hand, it is well known how important influencer marketing campaigns are now in the marketing of high-tech products or services. It is important, therefore, that influencer marketing activities stay within the limits of what is permitted under current legislation – as well as, in the future, MiCA regulation – so that they can be legitimately carried out.