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The CNMV will double down on monitoring cryptocurrency advertising at sporting events

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The National Securities Market Commission (CNVM) continues its crusade against crypto assets. Rodrigo Buenaventura, President of the Securities and Exchange Commission, announced as he appeared in the House of Representatives to present the body’s annual report that athletes and competition organizers must do their part in the fight against financial fraud.

“We will increase vigilance in this area and even analyze whether new regulation is needed to prevent the promotion of unauthorized companies or high-risk products at sporting events to fund clubs or organizations from jeopardizing the savings of supporters and the fans ‘ Buenaventura said.

The announcement from the President of CNMV comes after the Royal Spanish Football Federation (RFEF) delayed the submission of an agreement with cryptocurrency trading firm Huobi in late May pending clarification of the firm’s legal situation in Spain. Last November, the SEC also reprimanded Andrés Iniesta for promoting a crypto-active firm, reminding him that these products are unregulated and pose significant risks.

Since February last year, thanks to a new circular, the CNMV has required cryptocurrency advertisers to include an explicit warning in all their advertisements, reminding investors that they could lose “the entire amount invested”. But Buenaventura believes there is a need to go further in protecting savers. “Undoubtedly, we need regulation that lays out the requirements that companies that issue, distribute, guard or trade in crypto assets (not just cryptocurrencies) must meet,” he said during his speech to Congress.

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This regulation, which the President of the CNMV is talking about, is almost complete at the political level in the EU and is called MiCA (Markets in Cryptoassets Regulation). Since this is a regulation, it does not even need to be transposed into national law. “I am convinced that in implementing the new regulations, we should not take shortcuts, lower standards, shorten the time it takes to draft technical regulations or rush approvals, as this would reduce the level of effective investor protection,” Buenaventura reminded . .

The head of the regulator stressed that many of the fashionable digital assets are not assets, describing how they operate as typical of a Ponzi scheme. “They contain no rights or are backed by other assets or contractually offer future returns,” he recalled. “Its future price largely depends on expanding the investor base; that new investors are constantly entering. We’ve seen it many times in the history of financial spirals and bubbles, and we more or less know how it ends: the minority who get in early and get out on time win big, and the majority who get in late almost lose everything, he added.

During his speech, the President of the CNMV made a robotic portrait of investors in crypto assets: mostly urban, male and young people (between 16 and 34 years old). In his opinion, a small part of this group, “a very small minority”, shows a component of an alternative, disruptive culture that deliberately distances itself from financial institutions and the traditional world of regulated investments, money laundering controls or the fight against tax evasion. “By contrast, most investors are citizens without any oppositional, libertarian or anti-financial system component who simply joined the trend because they saw the seemingly promising results of those who entered in the beginning,” he recalled.

Source elpais.com

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