The emergence of social media in the 21st century resulted in new ways of advertising, the most favored one being ‘influencer’ marketing. It’s highly improbable for a person who vehemently uses Youtube or Instagram to not come across a single crypto advertisement endorsed by social media influencers.
However, Spain’s regulatory authorities have made it clear that it does not intend to promote crypto assets by way of this new source of advertisements. The country’s securities market regulator, the Comisión Nacional del Mercado de Valores (CNMV), has ordered crypto companies and social media influencers to notify the regulator before marketing their crypto-related products.
In addition, the posts promoting the use of crypto assets should include the following disclaimer: “Investments in crypto-assets are not regulated. They may not be appropriate for retail investorsand the full amount invested may be lost.”
Specifically, so-called influencers or outlets with more than 100,000 followers are required to follow a “mandatory procedure” and establish prior communication with the regulator with at least 10 days’ notice before posting their advertisements on social media. The release stated:
“The aim is to ensure that the advertising of the products offers true, understandable and Non-Misleading content, and includes a prominent warning of the associated risks. This is particularly relevant in the field of crypto Assets as the absence of a complete regulation is a challenge for investor protection.”
A similar action was taken by Singapore today after nearly completely restricting crypto-related advertising for the general public. Digital asset service providers are restricted from promoting their products in public places such as public transportation, public transportation venues, public websites, social media platforms, and broadcast, magazines, and other print media.