during the BitPinas Webcastwhich was issued on January 8, 2025 and discussed the implications of the Securities and Exchange Commission’s proposed “Crypto Asset Service Provider Rules,” according to crypto attorney Atty. Rafael Padilla expressed his support for the rules on the marketing and promotion of cryptoassets in the regulator’s draft that will soon be implemented.
What is the meaning: The rule, if finalized, would protect investors from misleading promotions while ensuring that genuine educational platforms are not affected.
About the SEC’s Draft Rules on Marketing and Promotion of Crypto Assets
- Includes: Social networks, events, paid media and educational content.
- Prohibition: Unauthorized entities cannot promote cryptoassets.
- Requirements: The promotion must contain simple, clear language and accurately disclose the risks without misleading content.
- Responsibility: Suppliers must ensure that third-party agents and marketers comply with regulations.
The lawyer’s advice
- Padilla noted that under section seven of the draft rules, marketing activities, including endorsements and promotions, “may qualify” as marketing depending on intent and substance.
- He noted that the SEC is focusing on attacking deceptive “educational platforms” that promote or advertise token projects under the guise of education.
“It seems SEC that those types of education, the so-called ‘KOL’ platforms, should be taken into account and considered in marketing, and again, I agree with this as a policy. And I think that it does matter if the SEC said, as long as this applies only to cryptoasset securities and crypto intermediary platforms that provide securities-related transactions and agreements.”
- He then emphasized that genuine educational content should aim to educate, not mislead the public.
- For the crypto lawyer’s analysis, the SEC can hold deceptive educational platforms and marketers liable for promoting cryptoasset securities.
- Meanwhile, Padilla sees that independent and paid promotions probably won’t be directly affected by the rules.
“It doesn’t mean that this will be a total ban on affiliate marketing, community managers, even educational platforms that behave like promotion and advertising companies. But all the SEC is saying is to be careful. Because if you really are an educational platform, then do it, but in essence you are marketing, the SEC can go after you.”
Here are the English translations. from Padilla’s statements cited above:
“The SEC is right that so-called ‘KOL’ educational platforms should be held accountable and considered marketing. Again, I agree with this as a matter of policy, and I believe the SEC is correct here as long as this applies only to cryptoasset platforms and securities or crypto intermediaries that provide securities-related transactions and agreements.”
“This does not mean that there will be a total ban on affiliate marketing, community managers or even educational platforms that act as promotion or advertising companies. What the SEC is simply saying is that you have to be careful. If you really are an educational platform, act like one. But if you are essentially trading, the SEC can take action against you.”
Worth reading: Our SEC CASP – Crypto Asset Service Provider Series:
This article is posted on BitPinas: Crypto Lawyer Endorses SEC Draft Marketing Rules
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