Bitcoin and Ether Are Not Securities in Belgium, Financial Regulator Clarifies

Cryptocurrencies like bitcoin and ether cannot be classified as securities or investment instruments, according to a communication issued by the financial watchdog in Belgium. The authority has tried to clarify the matter, noting that the digital coins may be subject to other regulations.

In response to multiple requests for clarification from citizens and businesses, Belgium’s Financial Services and Markets Authority (FSMA) has explained why it believes bitcoin, ether and other similar cryptocurrencies cannot be considered securities or investment instruments.

According to its position published on Thursday, the country’s securities laws do not apply to such digital assets, which have no issuer and are created by a computer code as opposed to the execution of an agreement between an issuer and an investor.

However, the regulatory body pointed out that if these crypto assets have a payment or exchange function, if they are exchangeable or fungible, other regulations may be applicable to them as well as to the persons that are providing certain related services.

The FSMA further remarked that despite the lack of specific legislation, cryptocurrencies can be equated to securities if they are incorporated into financial instruments and have an issuer such as an individual or a legal entity.

Seeking to provide assistance to interested parties, that have been sending more and more questions about the financial rules concerning crypto assets, the authority has adopted a “stepwise plan” to offer a series of guidelines for their classification.

The Belgian financial watchdog emphasized that the plan is neutral regarding technology. “The qualification as security, financial instrument or investment instrument does not depend on the technology that is being used,” it elaborated, adding that it’s ready to update the plan in order to reflect regulatory changes in the future.

One such event could be the upcoming adoption of the EU’s Markets in Crypto Assets (MiCA) framework, which was agreed upon by European institutions and member states at the end of June. In July, the FSMA launched a consultation on the classification of crypto assets. Earlier this year, the watchdog introduced registration requirements for crypto exchange and wallet service providers.

Do you expect authorities in other European jurisdictions to issue similar clarifications regarding the status of cryptocurrencies? Share your thoughts on the subject in the comments section below.