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Spain passes pioneering law regulating crypto advertising

New law states advertising must be ‘clear, balanced, impartial and not misleading’

Alyssa McMurtry   | 17.01.2022
Spain passes pioneering law regulating crypto advertising FILE PHOTO

MADRID

Spain published a new law on Monday that will regulate advertising around crypto-assets such as bitcoin.

It is a pioneering law in the EU that hopes to ensure advertisers or paid influencers will not mislead investors with unverified or cherry-picked claims about returns.

The law will come into effect in one month and require advertisers targeting more than 100,000 people to send the publicity campaigns to the CNMV, Spain’s fiscal watchdog, at least ten days in advance.

The advertisements will then be evaluated to ensure that they are “clear, balanced, impartial and not misleading.”

This means that advertisers will have no longer be able to broadcast false returns or historic returns that are based on periods of less than one year.

Given that many of the crypto assets are highly volatile, even long-term returns will not be allowed to be the main message of the advertisements.

The publicity will also have to do away with fine print, offers of “gifts” and any contradictory information.

Likewise, audio and video advertisements longer than one minute will need to begin and end with messages about the risks of investing in crypto, such as the possibility of losing one’s entire investment.

Last year, the CNMV and Bank of Spain released a warning about the complexity, volatility and potential lack of liquidity in these types of investments.

The CNMV acknowledged that crypto-assets like NFTs or cryptocurrencies are growing increasingly popular and can present opportunities to investors, but wanted that they come with significant challenges when it comes to protecting investors since they are not fully regulated.

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