The CNMV will begin to monitor cryptocurrency advertising from February 17

The National Market Commission de Valores (CNMV) already has a date to release its new powers in matters of surveillance of cryptocurrency advertising . On February 17, it will begin to exercise its control over these campaigns and, more especially, over those considered “massive” that are directed at a more of 100,000 people.

The Official State Gazette (BOE) has published the circular that regulates the advertising of cryptocurrencies in its edition this Monday. Its final provision specifies its entry into force “the month of its publication”

. In this way, the new powers of the CNMV will be effective 11 months after the Ministry of Economic Affairs

announced the end of the legal vacuum that reigned in this matter.

As had already been advanced in the texts open to public consultation by the institution, the circular includes the obligation to indicate specific warnings , the power of delete or modify campaigns in progress , the need to prior communication for some of them -which do not authorize- and the possibility of fines when the terms are contravened of this standard.

Mass Campaigns

As expected, focus has been placed on him or that are called “massive campaigns”. These are defined as those “aimed at more than 100,000 people, using any advertising medium”, for which the formulas to calculate their reach are established. However, the CNMV is empowered to raise the reference number -never to download it- “according to the circumstances and the experience gathered, and after a specific and duly motivated analysis”.

In this sense, it is established that for exterior signage -which was the one that unleashed the regulation of this activity in Spain – the “estimated number of people who will view the message” will be taken or, failing that, “the number of people that appears in the registry of the municipality or municipalities in which the outdoor advertising is installed.”

Beware of the ‘influencers’

The circular defends that its objective is that the advertising of bitcoin and its smaller sisters is “clear, balanced, impartial and not misleading”. For this reason, the rule covers both “cryptoactive service providers” and advertising service providers and “any natural or legal person that carries out on its own initiative or commissions advertising activity on crypto assets to third parties”. So that the influencers are also under the surveillance of the agency.

In this sense, the circular specifies: “In any case, the individuals who are perceived as influential or experts in social networks or audiovisual media that through referral programs, promotions or commissions received of any kind, disclose promoted content pointing out the advantages of crypto assets as an investment”.

It is worth remembering the recent episode with the footballer Andrés Iniesta And that, at the time of his wake-up call , the CNMV still had three months left to release the powers that this circular will grant it and that it will not be specifically advised investing in crypto.

Finally, the power of prior review on campaigns is reserved for those considered “massive”, which will have to be communicated to the supervisor “at least 10 business days before execution” . However, ultimately it is a obligation of communication and not of prior authorization and the advance term initially planned is reduced by five days. During this time, the institution could request the cessation or rectification of the points that it considers inappropriate.

Silence is not a yes

In that case , the person involved will have a maximum period of two days to comply with the demands of the supervisor or, where appropriate, argue against his requirements. In the same way, the CNMV may require specific information on the campaigns or specific advertising pieces that will have to be attended to in three days at the latest .

However, the institution chaired by Rodrigo Buenaventura reserves an ace up his sleeve . Although massive campaigns may start 10 days after their communication when their promoters have not received any indication against, the circular states: “In no case, the lack of response during the period between the communication and the start of the campaign will imply that the CNMV considers that the campaign complies with all regulations”.

This means that, even after those 10 days notice has elapsed, the institution may require information information on the campaign, demand its modification or even its suspension. And it is that the norm also requires the ecosystem crypto to keep specific details, as well as copies of their final forms, of the campaigns carried out in the last two years .

Neither gifts nor returns

Regarding specific warnings, in the style of those that now apply to complex products such as contracts for differences (CFD), establishes that the following message must always be included “with a format and position that guarantees its relevance”: “Investment in crypto assets is not regulated , may not be suitable for retail investors and lose the entire amount invested”.

Advertising campaign of a cryptocurrency platform against the Bank of Spain. EP

One of the novelties of the final text is the veto of the term “gift” . The circular states that “it will be avoided in those cases in which there may be a fiscal repercussion for the delivery of a good or a sum of money as an incentive to operate with a crypto asset.” In particular, the text abounds, “in all those operations that the tax regulations qualify as remuneration in kind”, such as can be rewards programs (rewards) or the distributions of tokens (airdrops).

With the aim to focus on those formulas that can reach a more inexperienced audience or with Less financial knowledge , are excepted from their surveillance “some professional activities” such as white papers, analysis , professional investment recommendations and offers addressed only to professional investors.

Another point to which the CNMV will pay special attention attention is to “avoid making references to high past returns”, so that they do not become a bait for new investors. If this is done, it should be “prominently noted that past returns do not constitute a reliable indicator

of future returns” and, in any case, it will be necessary to indicate “expressly the period of time to which it refers”.

In no case is the possibility of including “returns for periods less than 12 months “. In addition, it will be mandatory to indicate, “with the same prominence, the same information for the intermediate period, before or after, in which it would have occurred higher percentage depreciation“.

Exemptions

The same for digital currencies “whose sole use is digital access to a product or service, and is accepted only by its issuer or by a limited set of commercial providers” and for tokens non-expendable, better known by the English acronym NFT that have become so popular in the field of digital art.

“Campaigns corporate advertising “that only spread the name and activity of the cryptoactive platforms. Likewise, and along the same lines, advertising about “technical seminars, courses and conferences

on crypto assets that in no case encourage investment in them” as long as they are not promoted “for free or for a symbolic price by the obligated subjects of this rule”.

As regards the possibility of fines, the circular states that “the measures provided for in this rule will be adopted without prejudice of the application, when appropriate, of the sanctioning regime provided for in the applicable regulations”.

The text that has finally seen the light this Monday consists of seven regulations, a final provision and two annexes. The first abounds in the principles and criteria of the circular, while the second focuses on the characteristics that make cryptocurrencies a “high risk investment product”, according to redefines them the CNMV.

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