Spain is setting rules about how sponsors and others promote cryptocurrencies. Advertisers with more than 100,000 followers in the country must notify the National Securities Market Commission at least 10 days before plugging their products. They will face fines of up to 300,000 for breaching the rules, which come into force on February 17th.
If they receive payment for talking about cryptocurrencies, they need to reveal it. They will need to give clear and impartial warnings about the risks of investing in cryptocurrencies if that's the case. The rules also cover companies that hire PR companies.
The Financial Times reported that the chief of the CNMV said that there would be a back door to avoid regulation if there weren't covered. "This is a new terrain for us and for them, and there will be moments of tension, but that is always the case when you bring in rules for something that wasn't regulated before."
It is believed to be the first time a European Union country has brought in such directives. EU members have not agreed on how to regulate the digital currency. The member states are tackling some issues related to how they're advertised.
Some people who have plugged products have found themselves in hot water. A reality TV star was fined 20,000 by the French authorities for misleading commercial practices. The class-action lawsuit accuses Kim and Floyd of taking part in a "pump and dump" scheme.
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