Spain’s financial regulator, the Comisión Nacional del Mercado de Valores (CNMV), has imposed a fine of €5 million on Elon Musk’s social media platform X (formerly Twitter), permitting fraudulent advertisements related to crypto services. X is highly favored by several industry players to promote a wide range of assets from the crypto heatmap.
The CNMV stated in its ruling that company X did not fulfill its ”duty of assistance” by not clarifying whether promoter Quantum AI was authorized to render financial-investment services at all, or if it was included in the list of firms already alerted by Spanish or foreign authorities.
Quantum AI was reported to have posted ads on X featuring fake testimonials alongside logos of famous Spanish personalities and mimicking news publications — for example, by replicating the design of respected outlets such as El País — with the intention of deceiving people into making investments in crypto.
This action is based on the online regulations strengthened in 2023, which require Spanish online platforms to verify the financial ads (particularly those concerning cryptocurrencies) in terms of their authorization and regulatory status.
The CNMV initiated the formal investigation in November 2023, when a demand was sent to X to verify the legitimacy of Quantum AI. In the view of the CNMV, X was guilty of committing a “very serious ongoing violation” by repeatedly allowing these ads to remain on their site without carrying out proper checks.
Significance of the Decision
Platform accountability: The fine emphasizes the fact that social platforms like X aren’t just mere intermediaries — regulators want them to be involved in the process of filtering out, at least to some extent, financial advertisers. If publicly traded companies fail to exercise the necessary scrutiny, this could negatively impact market sentiment toward the platform due to ongoing lawsuits and result in a decline in their position on the stock screener.
Investor protection: By focusing on fraudulent “chiringuitos financieros” (financial beach-shacks) that assume a false legitimacy, the CNMV aims to reduce the risk for inexperienced or vulnerable investors.
Reputational risk: For X, apart from the financial penalty, the repetition of regulatory violations could severely dent trust and bring scrutiny from other jurisdictions.
In parallel with Spain’s decision, the Irish authorities are also examining X’s moderation guidelines. This is a clear sign of a broader trend in Europe, where digital asset marketing is heavily regulated, and platforms are gradually assuming liability for misleading or fraudulent financial promotions.
Previously, platforms frequently claimed that they only hosted advertisements and that their content was not their responsibility. However, regulators are now more inclined to view major platforms (e.g., X, Meta, Google, TikTok, etc.) as engaged intermediaries who are required to ensure the legitimacy of financial advertisers to the extent of allowing them to publish ads.
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