In a major win for crypto industry stakeholders, the Financial Services and Markets Authority (FSMA) of Belgium clarified that Bitcoin, Ethereum and other decentralized cryptocurrencies are not considered securities.
Not a security if there is no issuer
In his report, the regulator said,
“If there is no issuer, as in cases where the instruments are created by computer code and this is not done pursuant to an agreement between the issuer and the 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 has also clarified that cryptocurrencies classified 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 businesses are still required to adhere to anti-money laundering regulations in place for all cryptocurrencies.
Belgium’s progressive plan for cryptocurrencies like Bitcoin
The declaration is part of a step-by-step plan set 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 step-by-step plan is not legally binding and is “technology-neutral”, according to the FSMA.
However, the decision of the FMSA can serve as a precedent of sorts. The United States 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 requests for clarification from the financial regulator. This concerned the status of cryptocurrencies as securities and the general regulatory treatment of digital assets.
Currently, there is no specific digital currency legislation on securities and investments in Belgium. When it comes to adoption, the country is definitely not at the top of the list. According On-chain analysisit is Global Crypto Adoption Index, Belgium is ranked 94th.