Spain Watchdog CNMV Warns of AlyCoin ICO

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

Spain’s financial markets regulator, The Comision Nacional del Mercado de Valores (CNMV), today blacklisted a cryptocurrency website that promotes unregulated ICOs for an Ethereum-based token called AlyCoin. The crowdsale campaign was added to the regulator’s warning list after its operators were found facilitating unregulated investment vehicles for Spanish citizens without being authorized to provide ‎‎such activities in the country.

The CNMV accuses AlyCoin 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 investment services to local traders.

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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. The current legal framework does not contain a normative definition of cryptocurrencies. Interestingly, however, the central bank and CNMV’s statements described concepts such as initial coin offerings and distinguish between security tokens and those classified as a utility.

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Meanwhile, the 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. The watchdog’s warnings often lack technical specifications for such products and use Spanish terms that are easy to understand and accessible to the general public.

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. Even before ESMA’s curbs emerge, the CNMV required 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 were 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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