Spain’s CNMV Turns Eye to Cryptocurrency Brokers

So far, Spain does not have specific legislation governing cryptocurrencies.

The Comision Nacional del Mercado de Valores (CNMV), the financial regulatory body of Spain, today blacklisted a cryptocurrency and FX broker called FX TRADING CORPORATION. The company was added to the regulator’s warning list after it was found facilitating trading in different assets for Spanish citizens without being authorized to provide ‎‎investment activities in the country.

The CNMV accuses FX Trading Corporation of soliciting clients and providing them with financial services, which violates the second paragraph of Article 17 of the Securities Markets Law.

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Although the financial watchdog didn’t provide specific details, the inclusion of the domains means that they are not officially registered in Spain and are thus not authorized to offer trading services to local traders.

So far, Spain does not have specific legislation governing cryptocurrencies. The country’s regulators only tried to provide a definition of the virtual assets exclusively for the purpose of AML laws.

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Meanwhile, CNMV follows in the footsteps of other European regulators that frequently issue a series of warnings against companies engaged in schemes to promote cryptocurrency mining and investments.

FX Brokers Come Under Scrutiny

Over the last two years, the CNMV issued many circulars setting a host of new rules regarding trading costs and risk disclosure, leverage and advertising requirements. In essence, the guidance concerns companies that offer forex, contracts for difference (CFDs) and other speculative products such as binary options among retail investors in Spain.

For example, the CNMV requires any broker offering ‘excessive leverage’ greater than 10:1 to explicitly warn investors that it believes that such products are not appropriate for retail investors due to their complexity and the risks involved.

Operators are also required to ensure that clients are aware of the estimated cost in case they decide to close their position immediately after entering into the transaction.

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