Regulators in Spain are tightening rules on how social media influencers and others can advertise cryptocurrencies.
The government in Madrid said it will require “influencers” with more than 100,000 followers on social media to provide at least 10 days’ advance notice before posting messages urging people to invest in any digital currencies.
Cryptocurrency advertisers must show the content of their messages to the Spanish National Commission for the Securities Market (CNMV), Spain’s equivalent of the US Securities and Exchange Commission, according to Reuters.
Anyone who promotes cryptocurrency must also include a disclaimer warning their followers of the potential risks in investing, according to the new regulations.
In November, the CNMV used its official Twitter account to post a warning note in response to soccer star Andrés Iniesta.
Iniesta, a former player of the national strong club Barcelona, told his 25 million followers that he started trading in cryptocurrencies using the Binance platform.
But the CNMV responded to the tweet, saying that “crypto assets, being unregulated products, carry some significant risks.”
Celebrities with a massive following on social media have promoted cryptocurrency. In some cases, this has led to lawsuits.
Earlier this month, Kim Kardashian and boxer Floyd Mayweather were named in a lawsuit filed in Los Angeles federal court accusing them of misleading their fans into buying cryptocurrency as part of a “pump and dump” scheme.
Kardashian and Mayweather have been accused of making a “false or misleading statement” while promoting a crypto token sold by EthereumMax or EMAX.
Kardashian promoted the EthereumMax ad last June on her Instagram account, when she had 250 million followers.
“Are you guys into crypto???? This is not financial advice but sharing what my friends told me about the ethereum max token!” Kardashian wrote.
Kardashian and Mayweather’s posts helped boost the value of EthereumMax by a whopping 1,300% before it sank to “all-time lows” just a month later, it is claimed.
Those who bought EthereumMax between May 14 and June 27 last year are named as plaintiffs in the lawsuit.
US officials are also trying to figure out how to regulate the $3 trillion global cryptocurrency market.
Leading economic policy makers from some of the world’s leading bodies, including the International Monetary Fund, have called for regulations on digital currencies.