With an aim to reign in cryptocurrency ads promising wild returns, Spain has now joined countries like Singapore and India, stressing that the advertising of crypto-assets must be clear, balanced, fair and explain risks to the public.
Spain’s National Securities Market Commission has issued new guidelines, to come into force from February 17, that mandates the following warning to be placed on all crypto ads: “Investments in crypto-assets are not regulated. They may not be appropriate for retail investors and the full amount invested may be lost”.
The aim, said the Spanish watchdog, 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 crypto-assets as the absence of a complete regulation is a challenge for investor protection,” it said in a statement late on Monday.
The new Circular is applicable to crypto-asset service providers when they carry on these advertising activities.
Earlier, Singapore warned cryptocurrency and digital token providers not to promote or advertise their digital tokens via various media platforms to the general public.
In new guidelines, the Monetary Authority of Singapore (MAS) said that digital payment token (DPT or more commonly known as cryptocurrency) service providers should not promote their DPT services to the general public in Singapore.
The new guidelines also apply to banks and payment institutions that offer such services. These will further be expanded to include the transfer of cryptocurrencies and provision of wallet services.
“The trading of cryptocurrencies is highly risky and not suitable for the general public. DPT service providers should therefore not portray the trading of DPTs in a manner that trivialises the high risks of trading in DPTs, nor engage in marketing activities that target the general public,” said Loo Siew Yee, MAS Assistant Managing Director (Policy, Payments and Financial Crime).
The authority warned that trading cryptocurrencies is “highly risky” and not suitable for the general public, as the prices of crypto are subject to sharp speculative swings.
The Indian government in November last year raised concerns over crypto ads promising wild returns.
Indian crypto players bombarded the public with advertisements across platforms — doubling down on their marketing spend when the cryptocurrencies are yet to be accepted as legal tender and lack legal framework and regulatory norms in the country.
An advertisement by the Blockchain and Crypto Assets Council (BACC), a part of the Internet and Mobile Association of India (IAMAI) with industry players like CoinSwitch Kuber, CoinDCX, WazirX and Zebpay on board, had claimed that crores of Indians have invested over Rs 6 lakh crore in crypto assets to date.
Meanwhile, the much-awaited ‘Cryptocurrency and Regulation of Official Digital Currency Bill, 2021’, did not make it to the table during the Winter Session of Parliament amid growing concerns over the misuse of digital coins on the Dark Web for terror acts and drugs trafficking by militant organisations, and for money laundering and hawala-based transactions.
Prime Minister Narendra Modi had said that all democratic countries need to work together on cryptocurrency and ensure that it does not end up in the wrong hands.