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The Spanish National Securities Market Commission (CNMV) is preparing rigid measures to prevent illegal promotions of crypto platforms on social media to show its commitment to regulating the virtual assets sector.
Regulators in Spain are taking aim at illegal cryptocurrency marketing and promotion on social media. The National Securities Market Commission (CNMV) of Spain is developing more rigid measures to control social media advertising and marketing of cryptocurrencies. These regulations signal CNMV’s cross-broader plan to crack down on financial crimes such as money laundering and terrorist financing. They are designing the latest regulations to prevent companies from these types of financial frauds, especially the obligation to create a secure crypto investing environment for the users. Spain’s financial sector stated it could be possible mainly focusing on regulating crypto platforms and clamping down on unlicensed service providers.
According to CNMV’s officials, as part of its proactive approach, they closely monitor advertising efforts on well-known social media sites like X (previously known as Twitter), Facebook, or Instagram to detect all illegal crypto trading platforms and various mediums that are used for promotion of unlicensed financial firms. Frequently, these campaigns take advantage of celebrity endorsements to deceive investors about the legitimacy of the offerings. These campaigns often use false or misleading information to trick investors into investing in bogus crypto companies. Investors should be aware of the risk assessments with celebrity endorsements and should research any investment opportunity thoroughly before investing. The President of the CNMV, Rodrigo Buenaventura, stated, “we have been particularly active in fighting financial fraud. Crypto-finances and fraud are not synonymous, but a significant part of fraud in recent years has come from the crypto world.”
Spain is not the only country that is cracking down on illicit crypto promotions. Last month, the UK Financial Conduct Authority (FCA) issued 32-page regulations to ensure that crypto promotions are “fair, clear and not misleading.” James Daley, managing director of Fairer Finance, stated, “at least now the marketing of it is regulated, which means the FCA has been issuing warnings and ensuring that misinformation is stopped.” The CNMV’s new regulations require media outlets, social media platforms, and internet firms to confirm that the advertisements are legitimate financial organisations. This campaign aims to stop unauthorised businesses from disseminating ads for investment services.