Bitpanda and its adaptation to the Circular on the advertising of crypto-assets

Bitpanda and its adaptation to the Circular on the advertising of crypto-assets

On 17 February this year, the Circular on the advertising of crypto-assets presented as investment objects, drawn up by the Spanish National Securities Market Commission (CNMV), came into force.

This Circular does not regulate cryptoassets, their issuance, providers or characteristics, but only the advertising activity aimed at offering them as a possible investment. It defines for the first time in Spain the concepts of “cryptoasset” and “cryptoasset services” and includes an open and exemplary list of such services.

In this regard, the content and format of advertising campaigns are regulated for the first time, which must include clear, balanced, impartial and non-misleading content, as well as information on risks and certain warnings.

It should also be recalled that the Circular applies not only to the advertiser, but also to anyone involved in the creation and dissemination of cryptoasset advertising, such as agencies or media outlets, influencers, exchange platforms and social networks.

How have advertising campaigns adapted to the Circular?

During the time that the Circular has been in force, the advertising campaigns of firms such as Cryptan, Bit2Me or Binance have attracted the attention of users and consumers as well as marketing and communication professionals. However, Bitpanda’s campaign has particularly stood out.

In accordance with the CNMV Circular, the outdoor advertising pieces of Bitpanda’s advertising campaign, both the tarpaulin located on the Gran Vía in Madrid and the banners and other surfaces located at the Atocha station, have included the warning: “Investment in cryptoassets is not regulated, it may not be suitable for retail investors and the entire amount invested may be lost”. In addition, the campaign also includes additional information about the risks involved in crypto-assets by including a link where users can find such information.

Moreover, Bitpanda’s advertising has been accompanied by warnings about the profitability shown and the products to which it refers. On the other hand, the campaign is aimed at publicising the fact that last January the platform surpassed the figure of one thousand digital assets available to its users, an offer that it has been expanding on a weekly basis since last March.

Bearing this in mind, what is most striking to the public is that these ads take up a large part of the advertisement. Thus, they must occupy at least 20% of the surface of the advertisement. Thus, it can be inferred that Bitpanda has complied with the provisions that crypto-asset advertising must be clear, balanced and impartial, as well as truthful, comprehensible and not misleading, and that the commercial communication must include, in a format and position that guarantees its relevance within the advertising piece, the aforementioned warnings. 

Likewise, Bitpanda has also complied with the requirement of prior notification of mass advertising campaigns, understood, in principle, as those aimed at 100,000 people or more, and the CNMV has the power to veto if it considers that the campaigns do not comply with the provisions of the Circular.

Reactions to the Bitpanda advertising

Firstly, Bitpanda has stated that they make every effort to comply with regulatory requirements where they operate or advertise, but that they do not fully agree that 20% of their advertisements must contain a disclaimer.

As far as advertising professionals are concerned, some point out how dangerous and worrying the rise of the crypto world must be for the relevant authorities to establish the need to include such prominent warnings.  

Similarly, according to some reactions to the Bitpanda campaign in Madrid, it seems that these warnings generate a sense of unease about the crypto-asset industry, as they have referred to the fact that when you have the need to devote half of the advertising space to tell how dangerous what you bring is, it does not exactly generate a sense of tranquility.

Others, however, have positively valued the advertising campaign carried out by Bitpanda and we must remember that this text approved by the CNMV is a novel initiative, both in Spain and in the European Union, as until now there was no similar text in these markets.

Since the Circular came into force, the CNMV has reviewed a total of 118 advertising pieces in a total of 20 files. Of these, two thirds are direct communications from the entities themselves, while the rest correspond to the CNMV’s own supervisory initiative.