Spanish regulator launches first cryptoasset advertising case. Here's why it is important

CNMV, Spain's stock market supervisor, on Wednesday announced the initiation of its first case addressing potential breaches of regulations governing mass advertising campaigns for cryptoassets.

A Reuters report said that the regulatory steps, implemented at the beginning of 2022, are aimed at bringing order to the burgeoning landscape of crypto advertising, entrusting the CNMV with the authorisation of mass campaigns and the responsibility to ensure investors are well-informed about associated risks.

The CNMV said that disciplinary proceedings have been initiated against Spanish technology provider Miolos S.L. for its involvement in two mass advertising campaigns promoting cryptoassets.

Emphasising that this action did not predetermine the final outcome of the investigation, the regulatory body highlighted its commitment to upholding the integrity of the market. Miolos is yet to respond to the CNMV's actions, leaving the industry and investors awaiting further clarification on the matter.

"This is the first sanctioning proceeding to be opened for non-compliance with the circular regulating the advertising of cryptoassets," Reuters quoted Rodrigo Buenaventura, the head of CNMV, as saying during a financial event on Wednesday.

Buenaventura underscored the significance of adherence to the new regulations and stressed that this case should serve as a reminder for industry participants to respect the established rules.

As crypto and digital assets linked to traditional currencies continue their rapid growth, global regulators are increasingly concerned about the potential risks they pose to the financial system.

The CNMV is currently investigating four potential serious infringements, focusing on advertisers' failure to include essential information and warnings about the risks associated with the promoted cryptoassets. Additionally, the investigation centres on the lack of prior notification submitted by the entities involved.

The new regulationsmandate that advertisers and companies promoting cryptoassets inform the CNMV at least 10 days in advance about campaigns targeting over 100,000 individuals.

This proactive approach enables the regulatory body to scrutinise the content of campaigns, ensuring compliance and including necessary warnings about risks. The rules extend to cryptoasset service providers advertising their activities, as well as any individual promoting cryptoassets on their behalf or on behalf of third parties.

(With inputs from Reuters)

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