Spanish Regulators Crack Down on Crypto Ad Violations, Hint at Probing X

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Spain’s securities market regulatory body said it had begun investigating its inaugural case pertaining to a potential violation of regulations governing large-scale advertising campaigns for crypto assets.

The National Securities Market Commission (CNMV) announced on Wednesday last week that Spanish technology provider Miolos S.L. was being investigated in response to two of its extensive crypto advertising campaigns conducted in September and November 2022.

The CNMV alleges that Miolos S.L. failed to include risk warnings or submit its advertising campaigns to the CNMV for authorization. Spanish laws require advertisers and companies involved in marketing crypto assets to provide the CNMV with advance notice of the campaign content at least 10 days prior if the campaign targets over 100,000 people.

“This is the first sanctioning proceeding to be opened for non-compliance with the circular regulating the advertising of crypto assets,” said Rodrigo Buenaventura, chairman of the CNMV, in his speech at the annual Deloitte conference for the Spanish financial sector in Madrid last Wednesday.

Buenaventura added that the investigation would serve as a reminder for companies to obey the new regulations surrounding crypto advertising.

The regulatory body also mentioned that it was conducting a separate analysis of advertisements featured on the social media platform X, formerly known as Twitter, to look for possible infringements.

“In recent days we have detected advertisements on the social network X (formerly Twitter) promoted by an unauthorized entity,” Buenaventura said, emphasizing that social media platforms are obligated to verify whether advertisers are included in an authorized list before allowing their ads.

Buenaventura said that the ads they were investigating on X “make illegal use of the image of some Spanish actors and the design and identity of a national media to try to obtain data and money from investors.”

Spain implemented measures to regulate the widespread advertising of crypto assets at the beginning of 2022, assigning the CNMV watchdog the responsibility of approving mass campaigns and ensuring investors are informed about associated risks.

The new regulations were enacted in mid-February of the previous year, granting the CNMV the authority to closely oversee advertising for all types of crypto assets and incorporate risk warnings. These rules are applicable not only to crypto asset service providers advertising their activities but also to individuals advertising on their own behalf or on behalf of third parties.

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