GS Paper - 2 (International Relations)

With an aim to reign in cryptocurrency ads promising wild returns, Spain has now joined countries like Singapore and India, stressing that the advertising of crypto-assets must be clear, balanced, fair and explain risks to the public. Spain's National Securities Market Commission has issued new guidelines, to come into force from 17 February, that mandates the following warning to be placed on all crypto ads: "Investments in crypto-assets are not regulated. They may not be appropriate for retail investors and the full amount invested may be lost".

In new guidelines

  1. The new Circular is applicable to crypto-asset service providers when they carry on these advertising activities.
  2. Earlier, Singapore warned cryptocurrency and digital token providers not to promote or advertise their digital tokens via various media platforms to the general public.
  3. In new guidelines, the Monetary Authority of Singapore (MAS) said that digital payment token (DPT or more commonly known as cryptocurrency) service providers should not promote their DPT services to the general public in Singapore.
  4. The new guidelines also apply to banks and payment institutions that offer such services. These will further be expanded to include the transfer of cryptocurrencies and provision of wallet services.
  5. The trading of cryptocurrencies is highly risky and not suitable for the general public.
  6. DPT service providers should therefore not portray the trading of DPTs in a manner that trivialises the high risks of trading in DPTs, nor engage in marketing activities that target the general public.
  7. The authority warned that trading cryptocurrencies is "highly risky" and not suitable for the general public, as the prices of crypto are subject to sharp speculative swings.

Flashback

  1. The Indian government in November last year raised concerns over crypto ads promising wild returns.
  2. Indian crypto players bombarded the public with advertisements across platforms -- doubling down on their marketing spend when the cryptocurrencies are yet to be accepted as legal tender and lack legal framework and regulatory norms in the country.
  3. An advertisement by the Blockchain and Crypto Assets Council (BACC), a part of the Internet and Mobile Association of India (IAMAI) with industry players like CoinSwitch Kuber, CoinDCX, WazirX and Zebpay on board, had claimed that crores of Indians have invested over Rs 6 lakh crore in crypto assets to date.
  4. The Prime Minister had said that all democratic countries need to work together on cryptocurrency and ensure that it does not end up in the wrong hands.