Belgium starts consultation on classification of crypto as securities and investment instruments


Belgium is holding an open consultation to determine if it should classify certain crypto assets as securities, investment instruments, or financial instruments. The Financial Services and Markets Authority (FSMA), the country’s financial regulator, said in a statement:

“…the FSMA wishes to provide clarity, while awaiting a harmonized European approach[1], about when crypto-assets may be considered to be securities, investment instruments or financial instruments, and whether they may fall within the scope of the prospectus legislation and/or the MiFID conduct of business rules.”

While the European Union finalizes the landmark Markets in Crypto Assets (MiCA) regulation, which is expected in 2024, crypto businesses need clarity on whether they come under the purview of existing laws, the regulator said. To that end, the regulator has laid out guidelines to determine which cryptocurrencies might be classified as securities or financial instruments and which laws apply to them.

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The guidelines provide a step-by-step plan to determine the classification of crypto assets. The first step is to determine if the crypto asset is “incorporated into an instrument,” i.e., they are exchangeable or fungible.

The guidelines said that crypto assets that are not incorporated into an instrument do not qualify as securities. However, if they are incorporated into an instrument, there might be two situations.

Firstly, the instruments may represent a stake or voting right in a project or a right to payment of a certain amount.

In such a case, if the instruments are transferrable, the crypto-assets qualify as securities per the Prospectus Law and financial instruments. The Prospectus Law requires crypto-asset issuers to publish a prospectus for potential investors.

As financial instruments, the assets will also have to adhere to the MiFID rules of conduct. The EU’s Markets in Financial instruments Directive (MiFID) lays out regulatory obligations for investment firms to ensure investor protection.

If the instruments are non-transferable, however, then the crypto assets qualify as investment instruments, and issuers need to publish a prospectus per the Prospectus Law, the guidelines stated.

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Secondly, the instruments may represent a right to the issuer’s delivery of a product or service.

In that case, if the instruments have a primary or secondary investment objective, then it classifies as an investment instruments subject to the Prospectus Law. But if the instruments do not have an investment objective, the crypto assets will be outside the scope of the Prospectus Law.

The guidelines stated a number of aspects that need to be examined to determine whether an instrument has an investment objective. The crypto assets will be considered to have an investment objective if:

“…the instruments are transferable to persons other than the issuer; the issuer issues a limited number of instruments; the issuer plans to trade them on a market and has an expectation of profit; the funds gathered are used for the general financing of the issuer and the service or the project have yet to be developed: the instruments are used to pay staff; the issuer organizes several rounds of sales at different prices.”

The guidelines added that cryptocurrencies that do not have any issuer but are generated by computer code, like Bitcoin (BTC) and Ethereum (ETH), are not subject to the Prospectus Regulation, the Prospectus Law, or the MiFID rules of conduct.

The consultation is open to all stakeholders and representatives of investors and will close on July 31.


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