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Belgium’s FSMA clarifies Bitcoin, Ethereum are NOT securities

25 Nov, 20222 min readRegulation
Belgium’s FSMA clarifies Bitcoin, Ethereum are NOT securities

In a major win for stakeholders of the crypto-industry, the Financial Services and Markets Authority (FSMA) of Belgium has clarified that Bitcoin, Ethereum, and other decentralized cryptocurrencies do not qualify as securities.

Not a security if there is no issuer

In its report, the regulator said,

“If there is no issuer, as in cases where instruments are created by a computer code and this is not done in execution of an agreement between issuer and investor (for example, Bitcoin or Ether), then in principle the Prospectus Regulation, the Prospectus Law and the MiFID rules of conduct do not apply.”

The FSMA also clarified that cryptocurrencies that classify as non-securities may be subject to other laws and regulations. However, this is only applicable if they have a payment or exchange function, i.e. if a company uses them as a medium of exchange. Crypto-firms are still required to adhere to anti-money laundering regulations in place for all cryptocurrencies.

Belgium’s stepwise plan for cryptocurrencies like Bitcoin

The statement is part of a stepwise plan laid out by the country earlier this year in July, when the plan was presented for comment. The latest decision came after months of deliberation. Under Belgian or European law, the stepwise plan is not legally binding and is “neutral as regards technology,” according to the FSMA.

However, the FMSA’s decision may serve as a precedent of sorts. The U.S. is currently witnessing a landmark case between the Securities and Exchange Commission and Ripple Labs over the status of XRP.

The landmark statement came after repeated demands for clarification from the financial regulator. This was regarding the status of cryptocurrencies as securities and the general regulatory treatment of digital assets.

As of now, there is no digital currency-specific legislation on securities and investments in Belgium. As far as adoption is concerned, the country is definitely not leading the list. According to Chainalysis‘s Global Crypto Adoption Index, Belgium is ranked 94th.

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