New CNMV circular on the advertising of crypto-assets for investment purposes

Jan 17th '22

  • The new circular defines the rules on the content and format of the promotional messages of crypto-asset campaigns
  • They shall include clear, balanced, fair and non-misleading content and information on the risks in a prominent manner, as well as the following warning: “Investments in crypto-assets are not regulated. They may not be appropriate for retail investors and the full amount invested may be lost”
  • It establishes a mandatory procedure for prior communication to the Spanish National Securities Market Commission (CNMV) of mass advertising campaigns addressed to 100,000 people or more
  • It establishes the tools and procedures to make the supervision of the advertising activity of crypto-assets effective
  • The crypto-assets themselves, their issuance and the services provided relating to them are not regulated


The Spanish Official State Gazette (BOE) has published the new CNMV Circular on the advertising of crypto-assets for investment purposes, which establishes the rules, principles and criteria to which this advertising activity must be subject. 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 crypto- assets as the absence of a complete regulation is a challenge for investor protection.


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 crypto- asset advertising activity effective.


The new Circular establishes that the advertising of crypto-assets must  be clear, balanced and fair, and the messages shall provide information on the risks of the product which is easily understandable and visible. Specifically, the following warning must be included: “Investments in crypto-assets are not regulated. They may not be appropriate for retail investors and the full amount invested may be lost”. In addition, links or indications to access further information shall be included, with expressions such as: “It is important to read and understand the risks of this investment, which are explained in detail at this link”.


The Circular defines the way in which the CNMV shall supervise and establishes   a   mandatory   prior   communication   regime   for   mass advertising  campaigns,  defined  as  being  those  addressed  to  100,000 people  or  more,  which must be  communicated to  the  CNMV  at least ten days in advance. The remaining promotional activities shall also be subject    to    the    supervisory    action    of    the    CNMV,    but    prior communication   shall   not   be   required.   The   Circular   includes   the procedures  and  deadlines  for  gathering  information,  opposing  the commencement,    demanding    cessation    or    rectification    of    the advertising by the CNMV.


The Circular does not contain any rules related to the products themselves, or on their suppliers or the services provided in respect of these assets, but rather exclusively related to the requirements that the advertising activity intended for investment purposes must comply with.


The new Circular shall be applicable to crypto-asset service providers when they carry on these advertising activities, to advertising service providers and to any other natural or legal persons who carry on such activity on their own initiative or on behalf of third parties. These include natural persons who are paid to advertise and promote crypto- assets (products or services promoted via influencers).


The Circular establishes exemptions to the scope, such as the  cases where crypto-assets have the nature of financial instruments (in which case the CNMV Circular 2/2020 on the advertising of investment products and services shall be applicable), when they are not used for investment purposes, certain “utility tokens” and solely non-fungible tokens, “white papers” of new issuances, certain presentations and publications of analysts or workshops, and corporate advertising campaigns when they comply with certain requirements.


The   new   Circular   has   been   submitted   to   two   rounds   of   public consultation;  the  last  one  was  held  between  14  June  and  31  August 2021.  The comments received  have  been  borne in  mind  for  the  final draft of the Circular. The new Circular has been approved by virtue of the  competences  granted  under  Spanish Royal  Decree-Law  5/2021,  of 12 March, on extraordinary measures to support business solvency in response to the COVID-19 pandemic, incorporating a new Article 240 bis into the Spanish Securities Market Act (SMA) to reinforce the legal framework   protecting   citizens   and   investors   with   regard   to   the advertising of new financial assets and instruments in the digital sphere.


This Circular shall enter into force one month after its publication in the Spanish Official State Gazette (BOE), that is, on February 17, 2022.


Source: CNMV


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