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UK, Spain, Singapore to crack down on 'misleading' crypto ads as prices remain under pressure
(Kitco News) Britain, Spain and Singapore target crypto advertising as authorities try to rein in investor risk.
Spain announced on Monday that it would regulate advertising around crypto assets by authorizing the stock market supervisor (CNMV) oversight over ad campaigns that target more than 100,000 people. Social media influencers are included in this.
Starting mid-February, advertisers will have to inform the CNMV at least ten days in advance about the content of ad campaigns. Crypto ads will also have to include warnings about risks that come with crypto investments.
Britain will be targeting "misleading" crypto ads, said the country's finance ministry this week. "Cryptoassets can provide exciting new opportunities, offering people new ways to transact and invest – but it's important that consumers are not being sold products with misleading claims," Britain's Finance Minister Rishi Sunak said in a statement.
The rise in crypto popularity has come hand-in-hand with a surge of crypto-related advertisements that often do not warn investors of the real risks involved. In the UK, around 2.3 million people now own crypto assets, the ministry said, but far from all understand the investments they are making.
To curb "misleading" crypto ads, the Finance Ministry will include crypto assets under existing financial promotions legislation, which are subject to rules outlined by the Financial Conduct Authority (FCA). This means that crypto ads will be held to the same requirements as stocks and insurance products.
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Singapore's central bank is also limiting the promotions of crypto trading service providers in its own effort to protect investors.
"MAS [the Monetary Authority of Singapore] strongly encourages the development of blockchain technology and innovative application of crypto tokens in value-adding use cases," Loo Siew Yee, MAS Assistant Managing Director (Policy, Payments and Financial Crime), said in a statement. "But 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 trivializes the high risks of trading in DPTs, nor engage in marketing activities that target the general public."
These new advertising regulations are coming into force as the crypto market continues to face price pressures. At the time of writing, bitcoin was at $41,728.37, down 1.4% on the day. Meanwhile, ethereum, the world's second-largest cryptocurrency, was at $3,123.74, down 3.2% on the day.
