Spain’s securities regulator, the CNMV, has imposed a fine of five million euros on social media platform X for non-compliance with rules governing the advertising of financial products, including cryptocurrencies. The regulator’s decision, announced in an official bulletin, stems from a “very serious ongoing violation” of regulations introduced in March 2023. These rules require online platforms to verify the legitimacy of financial advertisers, ensuring they are not on lists of illegal companies and are authorized to offer financial services.

The investigation, launched in November 2023, was prompted by the detection of advertisements on X promoting an unauthorized financial company, Quantum AI, which was marketing cryptocurrencies. The postings were found to be in breach of the new regulations, which aim to enhance control over the advertising of financial products on websites, media outlets, and social networks.

Under the regulations, online platforms in Spain are legally obligated to scrutinize advertisers to prevent the promotion of unauthorized financial services. This includes checking that advertisers are not listed as illegal companies and confirming their authorization to offer financial services, as outlined by Rodrigo Buenaventura, the CNMV president at the time of the probe’s announcement.

The fine of approximately $5.8 million underscores the CNMV’s commitment to enforcing these regulations and protecting consumers from potentially fraudulent financial activities. The action against X serves as a reminder of the importance of compliance with financial advertising rules, particularly in the context of cryptocurrencies, which have seen significant regulatory scrutiny globally due to their volatility and potential for misuse.

This development highlights the evolving landscape of financial regulation in the digital age, where social media platforms play a crucial role in the dissemination of financial information and advertising. As regulatory bodies worldwide navigate the challenges of overseeing online financial activities, instances like the fine imposed on X demonstrate the proactive stance being taken to safeguard investors and maintain the integrity of financial markets.