- As per the financial watchdog in Belgium, cryptocurrencies like bitcoin and ether cannot be categorised as securities or investment instruments.
- If these cryptocurrencies have payment or exchange features, FSMA made it clear that they might be governed by other legislation.
The Financial Services and Markets Authority (FSMA) of Belgium has made it clear that Bitcoin, Ethereum, and other decentralised cryptocurrencies do not qualify as securities, which is a significant victory for stakeholders in the crypto-industry.
Such digital assets, which have no issuer and are produced by computer code as contrary to the execution of a contract between an issuer and an investor, are not covered by the nation’s securities laws, based on its position, which was published on Thursday.
However, other rules might be applicable to the instruments or the people who carry out specialized services related to those instruments if they have a payment or exchange function. Crypto assets issued by an individual or entity and integrated into instruments will probably be categorised as securities under FSMA’s systematic plan.
According to FSMA, Belgium’s “stepwise” plan is technology-neutral and does not depend on the technology used to qualify as a security, financial instrument, or investment instrument. The regulator added that it would modify the strategy as needed.
The FSMA also made it clear that cryptocurrencies that fall under the category of non-securities might be subject to additional rules and regulations. This only applies, though, if a business uses them as a means of exchange or if they have a payment or exchange role. The anti-money laundering rules that are in position for all cryptocurrencies must still be followed by crypto-firms.
The plan is technology-neutral, according to the Belgian financial regulatory body. It further clarified, adding that it is prepared to update the plan in order to take into account prospective regulatory reforms, The prerequisite as a security, financial instrument, or investment instrument does not change based on the technology that is being used.
The step-by-step strategy, according to the regulator, would serve as a roadmap until the Markets in Crypto Assets Regulation (MiCA), which is expected to be adopted by the European Parliament at the start of 2024.
The FMSA’s ruling, however, might set some sort of standard. The Securities and Exchange Commission and Ripple Labs are currently engaged in a historic legal dispute in the United States regarding the status of XRP.
In comparison to what the chairman of the US Securities and Exchange Commission believes, FSMA argues that ETH and BTC are not securities. Gary Gensler has frequently stated that ETH is a security, despite his belief that BTC is a commodity.
The financial watchdog in Belgium has been very clear about its position on cryptocurrencies; starting in 2022, it stated that individuals and legal entities seeking to offer custodial wallets or cryptocurrency exchange services in the nation must now register in advance.