Much has been made of social media influencers when promoting products, brands and hawking other things online, especially when what is being marketed is divisive. With that in mind, the Spanish government has outlined new rules for influencers regarding cryptocurrencies.
To that end, it says that influencers and brands with more than 100 000 followers must notify the National Securities Market Commission (CNMV) 10 days before they plan to post any promoted content involving cryptocurrencies.
This rule comes into effect on 17th February 2022, with failure to adhere to it potentially resulting in fines as high as €300 000 (~R5.28 million).
“The aim is to ensure that the advertising of the products offers true, understandable and non misleading content, and includes a prominent warning of the associated risks. This is particularly relevant in the field of cryptoassets as the absence of a complete regulation is a challenge for investor protection,” a press statement regarding the announcement explains.
“To this end, it defines the scope, specifies the advertising activity that must be subject to a prior communication regime and establishes the tools and procedures to be used to make the supervision of the cryptoasset advertising activity effective,” it adds.
Along with notifying the CNMV, influencers will need to notify the regulatory body about whether they receive payment for promoting cryptocurrencies, which will require them to also list some of the risks associated with crypto, akin to warning labels on cigarette packets.
Whether this would deter people from looking into and buying a crypto that their favourite influencer is hawking remains to be seen, but the recent spate of pump-and-dump cases involving dubious coins certainly calls for stricter measures to be put in place.
If successful, it will be interesting to see if other countries will follow suit, with both influencers and crypto coming under spotlight for regulators in recent years.
You can read the CMNV’s new set of rules here (PDF).
[Image – Photo by Kanchanara on Unsplash]
