Belgian regulator questions Bitcoin and Ethereum rules

Cryptocurrencies such as Bitcoin and Ethereum lack issuers and do not meet the criteria of securities, and therefore should not be subject to financial rules. This was stated by Belgium’s Financial Services and Markets Authority (FSMA).

The regulator responded to a rising number of inquiries concerning supervision of digital assets. The authority aims to close the most frequently encountered ‘grey areas’, including classifying cryptocurrencies as securities.

Under a technology-neutral approach approved in the country, the classification as a financial or investment instrument should not depend on whether the asset is based on blockchain.

According to a July public consultation paper, the instruments issued by issuers are likely to be securities. This means investors would need a prospectus. The issuance would need to comply with MiFID, which requires transparency and freedom from conflicts of interest.

Crypto startups must comply with AML-rules. Under MiCA, token issuers will have to present a white paper, comparable to a securities prospectus.

Rules adopted in Belgium in 2014 prohibit the distribution of blockchain-based instruments to retail investors.

Earlier, Binance’s executive vice president for Europe, Martin Brunko, would simplify the work of crypto companies in Europe.

In September, the exchange’s CEO Changpeng Zhao described the bill as ‘fantastic’, but ‘a bit strict’ on stablecoins. In his view, the document could become a ‘global standard’ in cryptocurrency regulation for other jurisdictions.

In November, the European Parliament pushed back the final vote on the bill to February 2023.

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