Spain tries to limit crypto promotions amid confusion about legislation
Like most other countries, Spain has struggled with figuring out what to do about cryptocurrencies and blockchain technologies. Between questions of legitimacy and regulation, many countries struggle with the decision of whether or not to support crypto. Spain decided to cautiously step towards not supporting it.
While they are not yet establishing any particular regulation about the currencies themselves, the Spanish national securities market commission has been issued power to regulate crypto-related advertising. In other words, the country will officially require certain things from crypto advertisements.
Spain’s new rules on crypto advertising
There are two parts to the change in legislation – influencers and their sponsors need to pre-notify authorities of certain types of posts and content, and they also need to warn of the risks that come with investing in any cryptocurrency.
While you’d be hard-pressed to find someone smart enough to set up a crypto wallet and also dumb enough to not be aware of the risks, it is nevertheless a positive change to require people to remind others of the risk that investments of any sort carry. Punishments for failure to comply will be fines of varying heights.
“We are very excited about how this will bring some order to how crypto is promoted, not just through traditional media but also through influencers,” the watchdog’s head, Rodrigo Buenaventura, said. The inclusion of influencers avoids a pretty easy backdoor that would otherwise no doubt have been used.
As it stands, the Spanish watchdog org will require prominent, clear and impartial statements about the risks of crypto, as well as the information that it is unregulated and could lead to the loss of invested assets. In other words, carries the same types of risks as other, regulated investments such as stocks, albeit those investments do not require such a warning tag to be attached to them.
The kick-off and impact
Last November, a Spanish footballer – Andres Iniesta – created a paid promotion for popular exchange platform Binance. The national securities market commission pointed out he was supposed to inform his followers of the involved risk of investing into crypto.
France already has similar rules – last year, they created a unit to investigate online crypto advertisements. A French TV star had to pay a $20k fine for posting ads for a Bitcoin trading site on Snapchat. The UK is also studying a proposal to tighten the rules placed on and around crypto advertising, requiring similar pre-disclosure as in Spain. In the Spanish situation, people who advertise crypto content have to disclose if they are being paid or otherwise compensated for promoting the crypto content they are posting about. Anyone with more than 100k followers falls under this rule, with fines going up to €300k.
The European Union has no specific rules on this subject matter – not yet anyway – but a speaker from Brussels said that the European Commission had no principled objection to states establishing legislation prior to a unified EU directive, as long as the rules are compatible.
In our world of esports, any promotion of trading platforms or cyptocurrency related endeavors will have to go through the appropriate authorities. More and more event organizers and teams are partnering with companies like CoinBase, FTX and Solana. They will now have to jump additional hoops to promote their partners during official broadcasts.