The Spanish National Securities Market Commission (CNMV) is intensifying its efforts to regulate crypto marketing and promotions on social media.
This move is part of a broader clampdown on financial fraud, especially concerning the unregulated and often misleading crypto marketing sector.
Spanish Regulators Move to Wrangle Crypto Marketing Fraud
Recent actions by the CNMV underline the growing concern about deceptive financial promotions, particularly in the crypto sector. Rodrigo Buenaventura, President of the CNMV, stated,
“We have been particularly active in fighting financial fraud. Crypto-finances and fraud are not synonymous, but a significant part of fraud in recent years has come from the crypto world.”
This statement highlights the critical need for regulatory bodies to address the increasing misuse of social media for financial scams.
The CNMV’s proactive approach includes scrutinizing advertising campaigns on social media platforms like X (formerly Twitter), promoted by unlicensed financial entities. These campaigns often illicitly use the image of public figures, misleading investors about the legitimacy of the offerings. “It’s hard to conceive of a more blatant attempt at fraud,” Buenaventura commented, stressing the need for rigorous enforcement of regulations.
Read more: Crypto Influencer Marketing: The Ultimate Guide to Getting Started
In response to these challenges, the CNMV has implemented new rules requiring internet companies, media outlets, and social networks to verify that advertisers are authorized financial entities.
This initiative aims to prevent the dissemination of investment service advertisements by unlicensed entities. Buenaventura also assured,
“We will rigorously exercise all our supervisory and sanctioning powers in these cases.”
Latest Crypto Promotion Rules in the UK
Spain is not the only country implementing such a crackdown. In the UK, the Financial Conduct Authority (FCA) has issued a 32-page guide to ensure that crypto promotions are “fair, clear and not misleading.” This move, along with the issuance of 146 alerts on the first day of new promotion regulations, marks a significant effort to curb the excesses in crypto investment promotions.
James Daley, managing director of Fairer Finance, praised the FCA’s initiative, stating,
“At least now the marketing of it is regulated, which means the FCA has been issuing warnings and ensuring that misinformation is stopped.”
Read more: How Can Crypto Marketers Use Twitter (X) to Their Advantage?
This development is a crucial step toward establishing more robust regulation in the crypto market.
However, the regulation of cryptocurrency marketing has sparked debate. Critics argue that treating cryptocurrencies as regulated investments could lead to a “halo effect.” This means that investors might take them more seriously due to apparent regulatory approval.
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Source: https://beincrypto.com/illicit-crypto-marketing-promotions-social-media-spanish-regulators/