Italy and Cryptocurrency Regulation: Is Influencer Marketing Legal?

Regulation - Cryptos - Influencers - MarketingCryptocurrency Regulation in Influencer Marketing

Steph Curry, Tom Brady, and Kim Kardashian are just some of the recent celebrities promoting cryptocurrencies, NFTs, or exchanges on their social profiles or other channels. It is now an industry practice to use celebrities and artists as part of a cryptocurrency marketing business.

This strategy is employed by both large corporations and start-ups, which often use influencer marketing as a form of promoting their projects through traditional social channels. However, some of these celebrities have had major problems with industry authorities, especially in the United States, due to the enforcement of regulations regarding the marketing of financial instruments or products.

Cryptocurrency regulation of financial instruments and marketing

From a regulatory point of view, the issue of online marketing becomes important in Italy when the token offered on the platform takes (or can take) the form of a financial product or instrument. In this case, the provision of services via remote means of communication, including the Internet, is subject to a number of obligations and restrictions.

The supervision of this activity is entrusted to CONSOB, which is also responsible for prosecuting any illegal offer of products or financial instruments by means of remote communication.

At the same time, the regulations stipulate that simple advertisements do not constitute services provided by means of remote communication, and thus are not subject to the above restrictions.

Promoting Cryptocurrency Assets and MiCA

At least in its latest draft, the Cryptocurrency Market Regulation, the so-called MiCA, also regulates marketing activities related to crypto asset offerings. Specifically, MiCA regulations require that information presented in promotional activities be fair, clear and not misleading, and consistent with the information contained in the white paper associated with the product being offered.

The above was reiterated and confirmed by the European Commission in its recent response following the submission of written questions during the debate in the European Parliament on the proposed Regulation (Issue E-004040/2022).

Indeed, the Commission recalled that MiCA’s provisions are broad enough to cover within its scope conduct that might be considered encryption in advertising, promotion, or marketing. MiCA also empowers directors to oversee cryptocurrency marketing operations.

Cryptocurrency Promotion Services

In answering the above question, the European Commission also recalled the rules on “cryptocurrency deposit services”, recalling that services are defined as

“Cryptomarketing to buyers on behalf of or in connection with the offeror or a party connected with the offeror.”

Cryptocurrency deposit services fall under the category of MiCA regulated services. The upshot is that those who make encryption placements are not only obliged to follow the rules about how they are placed, but are also obliged to obtain a license under MiCA.

Do’s and Don’ts of Influencer Marketing Campaigns

The application of the rules provided by remote communication technologies for financial products or instruments, as well as the future authorization under MiCA, is an important and particularly onerous consequence for those who, as creators or influencers, intend to carry out work with cryptocurrencies or specialize in Advertisements or promotions related to the platform on which it trades.

On the other hand, it is well known how important influencer marketing campaigns are now in the marketing of high-tech products or services. It is therefore important that influencer marketing campaigns be carried out legally within the limits of current legislation as well as future MiCA regulations.

Source of information: Compiled from CRYPTONOMIST by 0x Information.Copyright belongs to the author Lexia Avvocati, without permission, may not be reproduced

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