CNMV Signals Investigation Into X Over Unauthorized Crypto Ads
The Spanish securities regulator, the National Stock Market Commission (CNMV), is likely to step up its investigation into X, the platform formerly known as Twitter, for permitting unlicensed financial service providers to post crypto ads. All social media platforms and other service providers in Spain need to verify that ad campaigns are sourced from authorized financial service providers as per the law of the land.
The Spanish Regulator Intends Action Against X for Unlawful Crypto Ads
The National Stock Market Commission (CNMV), the securities regulator in Spain, intends to take action against X, formerly known as Twitter, for permitting unauthorized financial service providers to host crypto ads on its platform. Rodrigo Valbuena, president of the CNMV, stated that they had recently detected numerous ads on the social media platform that did not conform to the current regulation on crypto advertising.
At the Deloitte-ABC financial meeting, CNMV President Valbuena described the ads:
"The advertising pieces illicitly use the image of some Spanish actors and impersonate the design and identity of a national media outlet to try to obtain data and money from investors."
Valbuena was clear in denouncing this as one of the most blatant fraud attempts, stating that accepting these ads as legitimate via any channel would be both "difficult" and unacceptable from a "moral or legal" standpoint.
Crypto Regulation in Spain and Social Media Networks
Under the Spanish market regulations, communication service providers and social platforms like ISPs and social media networks are mandated to prevent the dissemination of ads from unlicensed entities. These platforms are mandated by law to verify that their customers are not on the CNMV’s list of “pirate” operators and are authorized to offer financial services in Spain.
Valbuena emphasized the CNMV's responsibility to monitor these platforms and penalize any violations. He also noted that they would exercise all their power to sanction those responsible in these cases.
He also criticized social media companies, stating that they "should not accept even one euro as remuneration for unauthorized advertisements from companies designed to profit by deceiving their followers."
The CNMV has been vigilant in overseeing how cryptocurrency service providers exploit various traditional and non-traditional media to advertise their products. In 2022, the institution issued specific rules governing cryptocurrency ad campaigns. Since then, the CNMV has intervened 210 times, reviewed 1327 ads, issued 196 information requests, and penalized a solitary crypto campaign.
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