The 'crypto bars' multiply between influencers and social networks: the CNMV opens 81 files and reviews 741 ads

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Andrés Iniesta may continue to invest in cryptocurrencies, but he no longer tells about it openly on Twitter.

Kim Kardashian won't be able to either for the next three years.

Celebrities,

, the internet and social networks have created an explosive equation that has served as a common thread for the proliferation of unreliable investment entities and increasingly related to cryptocurrencies and crypto assets.

.

Las

son las últimas en sumarse a una lista de activos que durante años han sido el anzuelo de los llamados

, es decir, entidades que ofrecen y prestan servicios de inversión sin estar registradas en la autoridad supervisora correspondiente (la Comisión Nacional del Mercado de Valores, in the case of Spain).

Therefore, they are not authorized to operate in the market.

In 2021, the number of warnings issued by the CNMV on this type of entity soared to 508, 119 more than in 2020 and a figure almost ten times higher than the 53 in 2017, according to data from the Spanish market supervisor.

Commission sources admit that in recent years there has been a greater activity of this type of beach bars and they mainly point to two reasons:

"Digital channels have great advantages for the financial customer, but they also allow these fraudulent entities to reach an almost unlimited number of potential victims, anonymously and at a very low cost,"

CNMV sources explain to

The advertising media and formats used to promote these services range from advertisements (

) in browsers and media -even widely distributed-, profiles on social networks, emails sent to investor accounts, etc.

"An element common to all of them is the biased and partial nature of the data offered on expected future returns, exaggerating the possibilities of obtaining benefits and hiding the risk of loss," they point out.

The rise in warnings issued by both the Spanish and international regulators reflects, on the one hand, a greater activity of financial beach bars through the internet and social networks and, on the other hand, an increase in the resources used by the supervisors themselves .

At the CNMV, for example, they have oriented part of their teams to monitoring and searching the Internet and sites such as Facebook, Instagram or TikTok, which is where they now mostly carry out their activity.

The body chaired by Rodrigo Buenaventura is committed to putting an end to the advertisements of beach bars on these massive platforms.

Google, in fact, announced a few days ago the activation of tools and policies to protect investors, in line with the proposals that the CNMV itself has made to technology companies within the framework of the Action Plan against Financial Fraud.

The 'crypto bars' are growing

The risk of financial bars lies in the fact that, in most cases, the apparent provision of such services is only a

with the promise that they will achieve a high return.

Among the techniques that they use the most, the offer of financial instruments that are trending at all times stands out: shares of electronic commerce companies, contracts on raw materials (oil, precious metals...) and, in recent times, increasingly, crypto assets and derivative products or futures on them.

"These are fashion assets that have become very popular in recent years," explain sources in the sector.

Authorities warned last year of a growth in potentially fraudulent entities and

related to virtual currencies,

, some of which have ended up in court.

To try to stop them, the CNMV launched a circular at the beginning of 2022 that regulates the advertising of cryptocurrencies.

This is the first standard at a national and European level of these characteristics and, pending the final approval of the MiCA regulation, it reaches the advertising field, in no case

, nor their suppliers nor the services provided on these assets.

Almost ten months after its entry into force, the CNMV makes a "positive" assessment of its application.

"As of October 6, we have analyzed in depth 81 cases, of which 54 have been initiated at the request of the entities themselves due to the launch of massive advertising campaigns.

, including web pages, and the sending of 136 requirements," sources from the Commission assure this newspaper. "36 queries have also been received with doubts about the correct application of the Circular, most of which have been answered.

The entities that advertise crypto assets are showing a willingness to comply with the standard and the data we have indicates that the warning messages and risk descriptions are understandable, visible and fulfill their function, "they add.

The circular was the CNMV's response to the dangerous increase in celebrities,

and more or less well-known celebrities who have not hesitated in recent times to actively promote crypto investment to their legions of fans.

One of the most striking cases in Spain involved the soccer player

, who used his Twitter profile (more than 25 million followers) to give voice to a popular investment platform for digital assets.

"I'm learning how to start with cryptocurrencies," wrote the former Barça player.

The regulator responded eloquently, but at that time he did not yet have any regulations in hand and the reaction could not go beyond a simple tweet.

On the other side of the Atlantic, the well-known

did more or less the same as Iniesta, but now the United States Securities and Exchange Commission (SEC) has just sanctioned her with 1.3 million dollars for promote a cryptocurrency without revealing that he was charging for it.

Kardashian, with 331 million followers on Instagram, will not only have to pay the fine, but she will not be able to advertise crypto assets for the next three years.

"Fraudsters always use products, characters or tools that are more current as a claim, thinking that they will be familiar to the people they contact," financial sources point out.

"Social networks and the Internet are the most effective means of propagation because they are cheap, fast, they allow many people to be reached in a short time and also because they can be closed immediately, making it more difficult to detect, locate and, if necessary, prosecute. ", they conclude.

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