A tweet about cryptos has gotten Spanish football star Andrés Iniesta into trouble with regulators.
On Wednesday evening, Iniesta posted a tweet stating “I’m learning how to get started with crypto with @binance”. The post was accompanied with three photos of the famous footballer using Binance services.
Shortly after that, Spain’s financial markets regulator CNMV posted the following response:
“Hello, @ andresiniesta8, crypto assets, being unregulated products, have some relevant risks. It is advisable to read the statement from @CNMV_MEDIOS of 9/2/2021 https://bit.ly/3d1rDWN and inform yourself thoroughly before investing in them or recommending others to do so”.
In February 2021, the Spanish regulator warned about cryptocurrencies, including Bitcoin and Ether, experiencinf high price volatility, which has been accompanied by a significant increase in (sometimes aggressive) advertising to attract investors.
In 2018 the Banco de España and the CNMV already warned about the high risk posed by these types of investments owing to, among other factors, their extreme volatility, complexity and lack of transparency.
Crypto-assets, including cryptocurrencies and the supporting technology, may galvanise and modernise the financial system in the coming years, but certain aspects and risks must be taken into account when assessing their value as an investment alternative or their use as a means of payment.
For instance, the European Union still lacks a regulatory framework that provides guarantees and safeguards similar to those applicable to financial products for crypto-assets such as Bitcoin.
From a legal standpoint, cryptocurrencies:
- are not considered a means of payment,
- are not backed by a central bank or other public authorities, and
are not covered by customer protection mechanisms such as the Deposit Guarantee Scheme or the Investor Compensation Scheme.
These are complex instruments that may not be appropriate for small-scale savers and their price has a high speculative component which may even entail the loss of the amounts invested.