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The Spanish securities regulator is currently exploring the possibility of investigating and imposing sanctions on X, formerly known as Twitter, for permitting unlicensed financial service providers to display cryptocurrency advertisements on its platform. Spanish law mandates that social networks and other service providers must ensure that ad campaigns originate from authorized financial service providers.

The National Stock Market Commission (CNMV), which oversees securities regulations in Spain, has indicated its intention to take action against X for this matter. Rodrigo Valbuena, the president of CNMV, has disclosed that the institution has recently identified multiple advertisements on X’s platform that do not comply with the existing regulations governing cryptocurrency advertising.

Speaking at the Deloitte-ABC financial meeting, Valbuena provided insight into the nature of these ads. He described them as advertising pieces that inappropriately use the images of certain Spanish actors and mimic the design and identity of a national media outlet in an attempt to illicitly obtain data and funds from unsuspecting investors.

Furthermore, Valbuena emphasized that these deceptive ads represent one of the most blatant forms of fraud, making it challenging to regard them as “normal, ethical, or legal” through any means.

The regulatory framework for Spain’s stock markets includes provisions obligating communication service providers and social platforms, including ISPs and social networks, to take measures to prevent the dissemination of advertisements contracted by unlicensed entities. These platforms are responsible for verifying that their clients are not included in CNMV’s list of “pirate” operators and are duly authorized to provide financial services.

Valbuena clarified that CNMV assumes the role of overseeing these platforms and taking punitive actions in cases of non-compliance with these regulations. He also criticized social network companies, highlighting that they should not accept any form of compensation for unauthorized advertisements from companies aiming to profit by misleading their followers.

The CNMV has been vigilant in monitoring how cryptocurrency service providers utilize both traditional and non-traditional media for advertising their products. In 2022, the institution issued a circular outlining specific rules for mass cryptocurrency advertising campaigns. Since then, CNMV has undertaken 210 interventions, reviewed 1327 advertising pieces, submitted 196 information requests, and imposed sanctions on a single cryptocurrency campaign.

The CNMV’s potential investigation into X underscores its commitment to enforcing regulations in the cryptocurrency advertising space and ensuring that only licensed entities can promote financial services. It remains to be seen how this situation will develop in the coming months.

Please share your thoughts on CNMV’s potential probe into X in the comments section below.

Frequently Asked Questions (FAQs) about Spanish Securities Regulator

What is the Spanish securities regulator investigating X (formerly Twitter) for?

The Spanish securities regulator, the National Stock Market Commission (CNMV), is investigating X for allowing unauthorized financial service providers to run crypto ads on its platform.

What does Spanish law require social networks and service providers to do regarding ad campaigns?

Spanish law mandates that social networks and service providers must verify that ad campaigns come from authorized financial service providers.

What did Rodrigo Valbuena, the president of CNMV, reveal about these unauthorized ads?

Rodrigo Valbuena described these unauthorized ads as using the images of Spanish actors and impersonating the design and identity of a national media outlet to deceive investors and obtain data and money.

How does the CNMV plan to enforce regulations on social platforms like X?

The CNMV is responsible for surveilling these platforms and sanctioning possible violations of regulations. It intends to exercise its authority to sanction those responsible for allowing unauthorized advertisements.

What steps has the CNMV taken to regulate cryptocurrency advertising?

In 2022, the CNMV issued a circular with specific rules for mass cryptocurrency advertising campaigns. Since then, it has conducted numerous interventions, reviewed advertising pieces, sent information requests, and applied sanctions to ensure compliance with regulations.

More about Spanish Securities Regulator

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1 comment

FinancialGuru88 November 14, 2023 - 6:31 pm

Valbuena said those ads rly bad, serious fraud going on, no bueno!

Reply

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