Spain and Singapore Tighten Cryptocurrency Promotion Rules

Spain is set to impose tighter regulations on cryptocurrency advertising, which will aim to ensure that all such messaging is “clear, balanced and fair,” as well as “non-misleading” in the future. With the crypto-sector lacking strict regulation, other countries including the U.K. have introduced measures to protect consumers from investing based on advertising messaging—despite their lack of understanding and experience in such a market. The new rules, announced by the Spanish Official State Gazette (BOE) will be overseen by the National Securities Market Commission (CNMV), which will dictate the use of a standard message to be included by cryptocurrencies advertising in the country. That message will read: “Investments in crypto-assets are not regulated. They may not be appropriate for retail investors and the full amount invested may be lost.” Communication with the CNMV will also be necessary for mass audience campaigns aiming to reach over 100,000 people, with the advertising submitted for approval no less than 10 days prior to being released. These rules will also apply to crypto-asset service providers promoting their own products—or third parties, which include influencers with an audience over the 100,000 subscribers who are paid to promote such assets. They will be expected to also make the CNMV aware before posting any messages and include a warning of the potential investment risk. These rules will come into force in mid-February following two rounds of public consultation, which took place last year. In February 2021, the CMNV issued a joint press statement alongside the Bank of Spain, warning about cryptocurrency investments and highlighting the “high price volatility” of currencies such as Bitcoin and Ethereum, which had been used in advertising material to attract investors. “These are complex instruments that may not be appropriate for small-scale savers and their price has a high speculative component which may even entail the loss of the amounts invested,” warned the joint statement, which claimed to have found over 7,000 different cryptocurrencies operating at the time. The Crypto Crackdown: How Ad Regulators and Platforms Are Targeting Scammers “There are also leveraged derivative products linked to cryptocurrencies through which it is possible to indirectly invest in them. This increases their complexity and the possibility of incurring losses higher than the initial investment even more. Therefore, extensive knowledge of cryptocurrencies and experience with them is required,” the statement continued. Meanwhile, the Monetary Authority of Singapore has also released guidelines around the promotion of Crypto or “digital payment token services (DPTs),” which is described as “highly risky and not suitable for the general public.”It added that “The public should not be encouraged to engage in the trading of DPTs.” As a result, it has been decreed that advertising of DPTs will not run in public areas or through any other media directed at the general public within the country, including public transport, broadcast media or any publications. Trading providers are still allowed to promote their services through their own website but they must not post any messaging that will “trivialize the risks of trading in DPTs.” The use of third parties such as social media influencers or third-party websites are also prohibited from promoting DPTs services. Is 2022 the Year Brands Get Serious About Crypto?

Blockchain

Spain and Singapore Tighten Cryptocurrency Promotion Rules

Spain has introduced new ad measures, while Singapore has banned such communications to the public

Stephen Lepitak

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Stephen Lepitak