Spanish regulators call for X probe over fraudulent digital currency ads

Spain’s National Stock Market Commission (CNMV), the nation’s primary securities watchdog, has called out social media firms like X for adopting a soft stance toward fraudulent digital currency promotions on their platforms.

CNMV Head Rodrigo Valbuena aired his views at the yearly Deloitte conference in Madrid, where he took a swipe at X (formerly Twitter) for failing to crack down on fraudulent digital currency advertisements, saying that it’s the social media firms’ responsibility to comply with local laws.

“The advertising pieces illicitly use the image of some Spanish actors and impersonate the design and identity of a national media outlet to try to obtain data and money from investors,” Valbuena said.

In his speech, Valbuena stated that Spanish laws place liability on social media companies for advertisements run on their platforms, urging them to take preemptive steps to prevent the spread of fraudulent promotions.

“I can assure you that we will scrupulously exercise all our capacities, supervisory powers and our supervisory and sanctioning powers in these cases,” noted Valbuena.

The regulator confirmed plans to increase staff strength by 15% to achieve its objectives. In 2022, the CNMV issued advertising rules for digital currency service providers to adhere to, reviewing 1,327 advertising pieces since then.

Holding social media platforms accountable

Global regulators demand greater accountability from social media platforms in the crusade against digital currency fraud via advertisements. In August, Thailand’s Ministry of Digital Economy and Society hinted at banning Facebook (NASDAQ: META) from the country over its reluctance to stifle the activities of digital asset scammers on its platform.

“We are asking the court to close Facebook, not allowing it to provide services in Thailand if they let these fake pages scam people,” Chaiwut Thanakmanusorn, head of the Ministry, said at the time.

In the U.K., the Financial Conduct Authority (FCA) and the Advertising Standards Authority (ASA) have issued comprehensive frameworks for digital currency promotions, imposing a measure of liabilities on platforms and advertisers.

Watch: Digital currency regulation and the role of BSV blockchain