Cryptocurrency regulation in Belgium 2022

Global cryptocurrency regulation standards vary significantly between countries all around the world. Some governments have enacted particularly stringent crypto tax policies for their residents. What about cryptocurrency regulation in Belgium? Keep reading the article to know the recent updates on cryptocurrency in Belgium and the EU.

Belgium regulates the services of cryptocurrency exchanges

The Financial Services and Markets Authority of Belgium (FSMA) has imposed a deadline for crypto exchanges and custodial wallet platforms in the country to comply.

Belgian crypto platforms had to register with the FSMA until September 1, 2022. To keep their active registration, crypto-service providers had to satisfy seven criteria, including being incorporated as a business with a minimum capital of €50,000.

New standards for transparency

The document approved by the deputies states that “all transfers of crypto assets must be accompanied by information on the sources and beneficiaries,” regardless of the wallet used. This, however, does not apply to transfers between individuals without the assistance of a service provider or transfers between service providers acting on their behalf.

Brussels wants to restrict the anonymity of cryptocurrency transactions

The draft revision of European money transfer legislation calls for cryptocurrency exchanges to be subject to the transparency requirements as money transfers.

In the mid of spring 2022, the European Parliament’s Economic and Monetary Affairs Committee and the Committee on Civil Liberties, Justice, and Home Affairs agreed on recommendations to reinforce EU regulations on AML and terrorist funding. This legislation package contains a modification of the European “TFR” law on funds transfers, which in its current form would expand the criteria for money transfers to crypto assets.

The goal is to “ensure that the traceability of crypto assets is equivalent to that of traditional money transfers” and to “prevent questionable transactions.”

Christine Lagarde has called for tightening regulation

Christine Lagarde stated following the FTX bankruptcy that the stability and trustworthiness of cryptocurrencies had been risked. Thus, the European Central Bank’s President complimented the second section of the MiCA regulation’s interest in “regulating more comprehensively” the cryptocurrency industry.

According to Belgium’s Financial Services and Markets Authority, BTC, ETH, and other decentralized cryptocurrencies are neither securities nor investment vehicles since they have no issuer. In other words, they were generated using computer code rather than an agreement between the issuer and investor.

FSMA also stated that its staggered approach is technology agnostic, which implies that it makes no difference whether digital assets exist and are serviced via blockchain or other traditional ways.

The text was initially published by FSMA in July 2022 to respond to commonly asked questions by Belgian crypto issuers, offerors, and service providers.

What to expect from MiCA?

The new regulation defines the European crypto ecosystem and has several parts that may be applied to individuals, investors, and cryptocurrency companies.

As a result, crypto businesses face additional obligations: they will be held “liable in the event of damage.” In addition, MiCA will “cover incidents of market abuse concerning any transaction or service, including market manipulation and insider trading.”

The European Parliament, whose Economic Affairs Committee recently approved the MiCa regulation, was scheduled to vote on the legislation in plenary in November to ratify its most current form. The vote was finally postponed until February 2023, according to a representative for the European Parliament.

However, regulators worldwide are wrestling with similar challenges; for example, legislation to make bitcoin and ether commodities is now being considered in the United States Congress.

In conclusion, given the previous events, we may conclude that the regulation of the crypto industry in Belgium and the EU, in particular, will be tightened. Some authorities defend this by claiming that they are doing so to protect investors and stabilize the financial sector.