CNMV is the Spanish National Securities Market Commission. It is an authority on the ongoing trends in the marketplace, as it conducts surveys. A recent survey concludes that almost 7%, or rather, 6.8% of Spaniards are keen on cryptocurrencies. In fact, they have been engaged in investing on diverse coins/tokens.
Obviously, they are well-versed in the handling of this arena. They might have gained knowledge from the highly-reputed investment and trading platform. Alternatively, they might have consulted with experienced experts, offline and online.
CNMV’s Concerns
The CNMV is concerned about this trending scenario. The group feels that investors may not have really understood the risks associated with dabbling in the crypto arena. Maybe, they failed to pay sufficient attention to the warnings issued, via advertisements related to cryptos. These warnings were new, issued in 2022.
The CNMV has the responsibility of inspecting and supervising the securities markets in Spain. It also takes up the monitoring of the activities of people, who are associated with these markets.
Way back in January 2022, there had been a crackdown on cryptocurrency advertisements. There was the fear amongst the Spanish authorities that people would follow the actions of a celebrity. This celebrity was Andres Iniesta, the football star. He is a member of the FC Barcelona team. He could influence the mindsets of people, consciously, or unconsciously. In turn, this would lead investors to go in for unnecessary risks.
Are such concerns important?
Well, they seem to be, in alignment with a survey undertaken by Analysis Investigation. The survey team talked to 1,500 adults, during May-June 2022. The survey concluded that around 40% of investors believe that there are regulations/laws attached to transactions involving digital currencies. Around 29% of investors believe that they carry risks, like what other types of investments do. Therefore, they can go ahead with their purchasing of various coins/tokens.
True, the public had viewed the large and easy-to-read advertisements regarding cryptocurrencies. They were warnings, sure enough. However, they did not suffice to create awareness about the lack of regulations involving crypto investments. It is this lack of awareness that is worrying CNMV.
CNMV is the Ultimate Authority
According to Spanish law, digital currencies do not classify as financial instruments. Therefore, there are no regulations attached to crypto enthusiasts entering the virtual currency arena.
Comprehending the dangers posed to them, especially beginners, the authorities brought in some amendments in March 2021. These amendments linked to the Spanish Securities Markets Law. They aimed to regulate advertising regarding digital currencies. In other words, those companies that dealt with cryptocurrencies, had to adhere to these amendments. Whenever they planned to advertise about their services to Spanish citizens, they had to follow the Law.
The Spanish Government is not trying to stop its citizens from increasing their income. It is only worried about them incurring losses via trading in cryptocurrencies.
The authorities believe that the virtual currency world poses more risks, than profits. After all, it offers no protection against defaults occurring due to the actions of the other party. This is unlike the way that traditional payment systems take care of their consumers/users. There are no traditional safeguards in place for crypto fans.
It is why the Government went ahead with initiating regulations concerning cryptocurrency advertisements. This way, citizens would be warned, and protected against heavy risks.
The CNMV would undertake supervision of these advertisements. It had official permission from the officially documented amendments. Its major target is ICO (Initial Coin Offerings), since they tempt the public to experience novel investment opportunities.
It does not matter that virtual currencies remain unregulated. The CNMV may still go ahead with minute scanning of the advertisements regarding cryptocurrencies. The CNMV may exercise its authority over both, Spanish, and foreign entities. Foreign entities, include U.S. companies, UK organizations, etc. However, the authority is in evidence, only if the target audience involves Spanish residents/investors.
At the same time, there is no restriction on the circulation of reports targeting professional investors, white papers, etc. They are grouped under formal advertising materials. Therefore, the CNMV may not interfere in these arenas. Similarly, the CNMV has no right to interfere in cases, where people are making payments via digital assets, crypto-assets, or non-fungible assets.