The CNMV opens its first sanctioning file for advertising of crypto assets

The National Securities Market Commission (CNMV) reactivates surveillance of the advertising of cryptoassets, one of the main focuses of supervision in recent years, given the avalanche of platforms and companies that try to attract new clients with promises of profitability that In many cases they are not fulfilled. Including important figures on social networks and ‘influencers’ who attract thousands of followers.

The president of the CNMV, Rodrigo Buenaventura, reported this Wednesday that the body has opened the first sanctioning file against a company for failing to comply with the order that came into force at the beginning of 2022, and that grants the supervisor administrative control of the advertising of cryptoassets.

Specifically, it is the firm Miolo Desarrollos, which is sanctioned for two massive advertising campaigns carried out in September and November 2022, in addition to not incorporating the necessary information or warnings and for not submitting the prior communication to the CNMV that establishes the regulation.

Beach bars on the networks

The CNMV also closely monitors the advertising of companies that fraudulently offer financial products on social networks. “In recent days we have detected ads on X (former Twitter) promoted by a financial beach bar,” Buenaventura explained.

According to the supervisor, the pieces illicitly use the image of some Spanish actors and impersonate the design and identity of a national media outlet to try to obtain data and money from investors. “It is about disseminating a fraud attempt committed by a pirate entity with a false website and taking advantage of the prestige of famous people without their knowledge (much less consent),” explains the CNMV.

The agency warns that these types of platforms or social networks have the legal obligation to verify that advertisers are not on the list of ‘piracy entities’. «The law assigns the CNMV to monitor this area and sanction non-compliance. “I assure you that we are going to scrupulously exercise all our capabilities, powers of supervision and sanction in these cases,” he assures.

Investor protection

The CNMV hopes that this type of action will serve to remind us of the risks of a market about which the supervisor has been very critical in recent years. Above all because of the misuse that, in his opinion, is made of a technology with so much potential.

At this point, Buenaventura recalled that the recent European regulation that came into force this year to regulate this market (Mica) “represents a milestone on an international scale, but it is not the perfect solution.” According to him, he warned, this standard “does not address all the risks of cryptocurrencies and the levels of investor protection are far from what they should be.” “The cryptocurrencies that we know today are also not contributing to the financing of European companies, so they are quite useless from the point of view of contribution to financial markets,” he criticized.

The advertising control rule on cryptoassets established that campaigns considered massive – those aimed at more than 100,000 people – must communicate their content to the supervisor, with a period of 10 days in advance to demonstrate that they meet the requirements. Among them, the supervisor’s interest stands out that said advertising does not include references to high past returns.

As established, this advertising must use “simple and easy to understand” language with an “easily readable” font, highlighting in visible text a message indicating that “investment in crypto assets is not regulated, it may not be appropriate.” for retail investors and lose the entire amount invested.

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