Spanish regulator opens first cryptoasset advertising case

By Jesús Aguado

MADRID (Reuters) -Spain’s stock market supervisor said on Wednesday it had opened its first case relating to a possible infringement of recent rules governing mass advertising campaigns for cryptoassets.

The supervisor also said separately that it was analysing some advertisements carried on social media platform X, formerly known as Twitter, which was taken private by Elon Musk, for potential infringements.

X did not immediately reply to a request for comment.

Madrid took steps to regulate the rampant advertising of cryptoassets at the start of 2022, tasking the CNMV watchdog with authorising mass campaigns and making sure investors are aware of the risks involved.

The CNMV said on Wednesday that it had opened disciplinary proceedings against Spanish technology provider Miolos S.L. over two mass campaigns advertising cryptoassets. It said this did not prejudge the final outcome of the investigation.

Miolos did not immediately respond to an emailed request for comment on the CNMV’s action.

“This is the first sanctioning proceeding to be opened for non-compliance with the circular regulating the advertising of cryptoassets,” Rodrigo Buenaventura, the supervisor’s head, told a financial event on Wednesday.

Buenaventura said this should serve as a reminder of the need respect the rules set out in the new regulations.

The rapid growth of crypto and digital assets pegged to traditional currencies has drawn attention from regulators worldwide, who fear they could put the financial system at risk.

The supervisor said it was investigating four possible serious infringements over failing to include information and warnings on the risks of the advertised cryptoassets and for not submitting prior notification.

Buenaventura said the CNMV was particularly active in the fight against financial fraud involving cryptoassets.

“In recent days we have detected advertisements on the social network X (formerly Twitter) promoted by an unauthorised entity,” he said, adding that social media platforms were obliged to check if advertisers were on an authorised list.

Advertisers and companies that market cryptoassets must inform the CNMV at least 10 days beforehand about the content of campaigns targeting more than 100,000 people.

The new regulations came into effect in mid-February last year and allowed the CNMV to specifically monitor advertising for all cryptoasset types and to include warnings about risks.

Spain’s rules also apply to cryptoasset service providers when advertising their activities and to any person advertising on their own or on behalf of third parties.

(Reporting by Jesús Aguado; Additional reporting by Emma Pinedo; Editing by Inti Landauro and Alexander Smith)