Belgium’s Financial Services and Markets Authority (FSMA) has clarified its regulatory stand on cryptocurrencies. It said that bitcoin (BTC) and ether (ETH), with no issuer behind them, will not be counted as securities.
Belgium FSMA said its policy “is neutral as regards technology.” It further clarified that the classification of a financial instrument should not depend on the technology it uses. FSMA would go by the principles that issuers of a financial instrument should publish a prospectus before its launch and clarify any conflicts of interest.
It mirrors the EU rules in a July consultation, that underscored transferable instruments with an issuer will be considered securities. It makes cryptocurrencies like bitcoin not count as security with no issuer backing it. But laws seeking conformity to anti-money laundering procedures will apply to BTC and ETH.
Court cases on the classification criteria had been making news. In the US, whether to treat crypto as a security or not has been a long-standing issue, with the judgement in SEC Vs Ripple Labs case being awaited as a watershed moment. In this case, the SEC is arguing that Ripple Labs should have registered its cryptocurrency XRP as a security before its launch.
However, BTC and ETH are still subject to anti-money laundering provisions. It’s illegal for professionals to distribute crypto products to retail clients.
A new EU law — the Markets in Crypto Assets (MiCA) — which is yet to come into force will make it mandatory for new crypto offerings to release a white paper, somewhat similar to stock prospectus.
