Spain’s Comision Nacional Del Mercado de Valores (National Securities Market Commission or CNMV) has issued a statement clarifying that, to date, it has not approved any ICOs fundraising within its jurisdiction.
According to a release from the Commission processed [Google Translate]:
“The CNMV has not approved any information prospectus to date or has exercised any power of authorization or verification of any operation of that nature.”
The regulator writes that it was prompted to issue the clarification because of, “information published these days in some media…about possible fundraising operations…through ICOs (initial coin offerings), in which investors would receive tokens…(or) vouchers representative of certain rights registered with blockchain…blockchain, which is often used also in the area of so-called ‘cryptocurrencies’…”
The regulator says it has done some work to ensure that, “some projects of this type” have been monitored to ensure that article 35.2 of Spanish Securities Market Law is fulfilled, namely, “total issuance of less than 5 million euros…issue to less than 150 retail investors…(and) minimum per investor at least 100,000 euros.”
The CMNV adds that it has required that all ICO prospectuses in Spain jurisdiction be circulated with the caveat:
“(This) is not an information brochure nor has it been the object of any kind of review by the CNMV or any other administrative authority,” or similar phrase.
The CMNV release also refers to a previous consumer warning issued jointly by the securities regulator and Banco de España on February 8, 2018:
“(I)t is essential that whoever decides to buy or invest in assets of this type or similar consider all associated risks and assess if you have enough information to understand what is being offered to him.”
The CMNV adds that it’s February 2018 warning:
“…referred, among other aspects, to the lack of regulation in this area, the cross-border nature of the phenomenon, (the) high risk of loss of capital invested…possible problems of illiquidity, the extreme volatility that can affect this type of assets and the possibility that the information provided is inadequate.”
ICO’s (initial coin offerings) were once viewed as a convenient way to draw capital directly from retail investors to “innovative” startups while sidestepping onerous securities regulations and expensive associated procedures.
In practice, however, fraud, market manipulation, exchange failure, incompetence and criminal use of cryptocurrencies have been rampant, and most promised innovations have yet to materialize.