Advertising of unregulated cryptocurrencies, such as bitcoin, has surged, particularly by social media influencers, drawing attention from regulators worldwide.
Under the label “stock-tok”, thousands of social media videos are now circulating online, with so-called ‘experts’ urging people to invest in cryptocurrency or buy their money-making course.
There are an estimated four million people in Spain who have invested in cryptocurrency, but the crypto phenomenon is especially grabbing the attention of young people between the ages of 25 and 30.
“It’s like telling a kid, ‘here’s a Ferrari, you can drive it a 200km/h, look how I do it’, without them even knowing how to drive,” Álvaro Huerta of online trading provider IG Group told Spanish broadcaster RTVE.
Under new rules that will come into place in February 2022 in Spain, ads for cryptocurrencies and other crypto assets must be “clear, balanced, impartial and non-misleading,” stock market regulator CNMV said in a statement.
They must also include “information on risks in a prominent manner,” it added.
Providers of crypto services must inform the regulator of ad campaigns aimed at 100,000 people or more with at least 10 days notice.
These rules also apply to promotional activity by any person advertising on behalf of third parties, such as social media influencers.
In November, the regulator scolded Spanish football star Andres Iniesta after he promoted the cryptocurrency exchange platform Binance on his Twitter and Instagram accounts.
In a tweet sent to Iniesta, CNMV recommended that he be “thoroughly” informed about cryptocurrencies “before investing in them or recommending others to do so.”
Cryptocurrencies are highly volatile, and because of their global and decentralised nature, attributing a single cause for a rise or fall in their price is difficult.
China banned cryptocurrency transactions at the end of September.