Belgian FSMA surveys crypto investors before taking on new ad regulation authority

March 20, 2023 Coin Telegraph

Crypto ads in Belgium will bear a blunt warning after a new regulation takes effect in May, and “mass” advertising campaigns will be subject to advance FSMA approval.

The Belgian Financial Services and Markets Authority (FSMA) will have new powers to supervise virtual currency advertising when a new regulation comes into force on May 17. In preparation for its new role, the agency commissioned a survey of investors.

The new regulation will have three aspects. First, it will require accuracy and clear language, with no statements on future returns of value. Second, there will be a mandatory warning on all advertising:

“Virtual currencies, real risks. The only guarantee in crypto is risk.”

In addition, a “broader warning should sum up the various risks in greater detail.”

Finally, campaigns with a target audience of 25,000 or more (mass campaigns) will have to be submitted to the FSMA at least ten days in advance “to enable the FSMA to intervene, if necessary, before the campaign actually begins.”

FSMA Introduces Rules, Launches Educational Video and Game Module to Protect Consumers Investing in Virtual Currencies

Full news: https://t.co/DrJGYVxUhU pic.twitter.com/IWAIdT6oQG
— Regxplora (by Regxelerator) (@regxplora) March 20, 2023

The FSMA will also boost educational efforts through its Wikifin financial education center. In preparation for its new role, the FSMA commissioned a survey of 1,000 Belgian investors in November 2022 who placed money in investment products beyond savings, term deposit and pension accounts.

Over a third (34%) of investors surveyed in the age group 16-29 bought virtual currencies, with the proportion falling to 11% for the 50-59 age group. Men make up 80% of the buyers. Investors were concentrated in Flanders (63%), with only 22% living in Wallonia and 15% in Brussels.

Crypto investments tended to be smaller than traditional ones, with only 15% of investors holding more than 10,000 euros’ worth of crypto and 31% holding less than 500 euros worth. Crypto investors were more dependent on the advice of friends, family, apps and “robo-advice” than traditional investors.

The FSMA began regulating cryptocurrency exchanges in May 2022. The United Kingdom has also imposed tightened requirements for crypto advertising recently.

‘If a government bans drugs, it should also ban crypto’ — Belgium’s former finance minister

March 17, 2023 Coin Telegraph

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Members of the European Parliament have been discussing the impact of the failure of Silicon Valley Bank, Signature Bank and Silvergate Bank on markets in their jurisdictions.

Johan Van Overtveldt, a member of the European Parliament and the former Minister of Finance of Belgium, has called for a “strict ban” on crypto as a result of the current banking crisis.

In a March 17 tweet, Overtveldt suggested lawmakers should consider banning cryptocurrencies as a “lesson” from the collapses of Silicon Valley Bank, Signature Bank and Silvergate Bank in the United States, referring to digital assets as “speculative poison.” Members of the European Parliament have been discussing the impact of the failure of these banks on markets in its jurisdiction.

“If a government bans drugs, it should also ban cryptos,” said Overtveldt.

Nog een les te trekken uit de huidige bankcommotie. Leg een strikt verbod op cryptocurrencies op. Speculatief gif en geen enkele economische- of sociale toegevoegde waarde. Als een overheid drugs verbiedt, moet ze ook crypto’s verbieden.
— Johan Van Overtveldt (@jvanovertveldt) March 17, 2023

A finance minister of Belgium from 2014 to 2018, Overtveldt became a European Parliament member in 2019 and part of its Committee on Economic and Monetary Affairs. In October 2022, the committee approved the Markets in Crypto-Assets, or MiCA, framework, expected to go into effect starting in 2024.

As the impact of the banking crisis unfolds, many U.S. lawmakers have also claimed financial institutions’ ties to crypto firms were partly responsible for their collapse, starting with Silvergate’s voluntary liquidation on March 8. Silicon Valley Bank followed on March 10 amid a bank run, and New York regulators took control of Signature on March 12. SVB Financial Group has since filed for Chapter 11 bankruptcy.

Belgian MP receives Bitcoin salary for a year: Here’s what he learned

January 9, 2023 Coin Telegraph

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Christophe De Beukelaer considers his experiment successful, as he raised awareness among the local lawmakers.

At the end of January 2022, member of the Belgian parliament Christophe De Beukelaer became the first European politician to convert his salary to Bitcoin (BTC). Celebrating the anniversary of this experiment, Cointelegraph reached out to a lawmaker to know more about his experience.

Back in 2022, Beukelaer, who represents Humanist Democratic Centre (CDH) party, cited the example of New York City Mayor Eric Adams and how American politicians are working to make their native states or cities Bitcoin hubs to justify his decision. The Brussels MP’s monthly salary of EUR 5,500 ($6,140) was to be converted to Bitcoin using the Bit4You crypto trading platform.

“I did this political act of paying in Bitcoin to defend political ideas,” shares Beukelaer, citing four ones: defending financial freedom and economic opportunity and combating financial illiteracy and growth model. The last one is perhaps the most interesting, as the lawmaker, who’s calling himself a “pragmatic environmentalist,” sees a clear link between Bitcoin and the environmental clause:

“What does the central bank do when it prints money as it has done in recent years? It gives the illusion of infinite resources and thus encourages all economic actors to produce and consume more and more.”

Beukelaer considers his experiment successful in both putting Belgium on the global crypto map and encouraging local officials to educate themselves on digital assets:

“A lot of politicians said to themselves: ‘De Beukelaer is not an anarchist. If he is interested in Bitcoin, there must be something interesting behind it.’”

Was it comfortable in practical terms? The positive answer is hardly imaginable, given the BTC’s decline from almost $38,000 in Jan.2022 to $17,246 by press time in Jan.2023, but the MP didn’t regard his experiment as an economic strategy from the very beginning:

“It was a political act and not a financial gesture. Like those who grow mustaches in November to fight prostate cancer. I put this salary in Bitcoin on a cold wallet every month and I haven't touched it. My goal was not to live in crypto.”

While the first major step to Pan-European regulation is undertaken, Beukelaer highlights the reservations of the Markets in Crypto-assets legislation (MiCA): the excessive constraints imposed on the personal holding of crypto or the way stablecoins are considered.

Europe is heading towards hard times, a politician believes, citing the crises in energy supply and climate, and the rise of authoritarian leaders. It is in that regard how Western countries will gradually understand the usefulness of crypto.

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

November 27, 2022 Bitcoin.com

The state of crypto in Western Europe: Swiss powerhouse and French unicorns

October 16, 2022 Coin Telegraph

Austria

From taxes and legislation to the local startups and professional associations — all you need to know about blockchain and crypto in Western Europe.

Despite the turbulence that broke out in the crypto market this summer, there is an important long-term marker that should be considered in any complex assessment — the combination of adoption and regulation. The latest report by EUBlockchain Observatory, named “EU Blockchain Ecosystem Developments,” tries to measure this combination within the European Union, combining the data on each and every member country from Portugal to Slovakia.

As the original report counts more than 200 pages, Cointelegraph prepared a summary with the intent to capture the most vital information about the state of crypto and blockchain in Europe. We started from a group of countries that are usually labeled as “Western European.”

Austria

Numbers: 50 blockchain solution providers, $48.72 million (50 million euros) in total funds raised

Regulation and legislation: A registry for Virtual Asset Service Providers (VASPs) was established by the Financial Market Authority a year later, in 2020. Regulators have adopted an “overall non-restrictive approach” toward crypto and blockchain and crypto mining remains largely unregulated.

Taxes: As is the case in most European countries, digital currency exchange is VAT-exempt. Capital gains from the sale of crypto are subject to a progressive income tax that amounts to up to 55% for individuals and 25% for corporations, but digital taxation policies may apply if the digital currency generates interest income and thus qualifies as an investment asset.

Notable initiatives: In November 2019, the Austrian Blockchain Centre (ABC) was created to explore blockchain applications in the fields of finance, energy, logistics, public administration and the Internet of Things. ABC, currently involving more than 21 institutions and 54 companies in its public-private partnership model, aspires to become the world’s largest blockchain research center. Blockchain is also a key facilitator of the Smart City Vienna and Open Government Data initiatives.

Local players: Bitpanda, a Vienna-based trading platform, which market value exceeded $4 billion in 2021, Blockpit, a digital assets investment platform responsible for more than $500 million traded in 2017, and Conda, a crowd-investing platform for Austrian startups.

Belgium

Numbers: 47 blockchain solution providers, 992 blockchain professionals.

Regulation and legislation: According to the report, there are currently “no specific laws or regulations” in Belgium. In 2017, Financial Services and Markets Authority (FSMA) published a communication on an overview of the legislation and regulations that may apply to Initial Coin Offerings (ICOs) and crypto assets.

At the same time, FSMA maintains a red list of fraudulent crypto companies. Nevertheless, utility token offerings are considered “a regular option” to raise capital. The FSMA characterizes crypto assets as investment instruments given that they may provide rights to revenues or returns, a means of storage and exchange given their convertibility into other assets or a utility token if they provide access to certain products or services.

From May 2022, registration for VASPs and custodial wallets is obligatory. The providers must fulfill certain conditions including status as a legal entity and maintaining minimum capital of 50,000 euros.

Taxes: Tax stands at 33% on any cryptocurrency income, depending on how the individual is investing. A mere increase of value over time escapes taxation, but the investor is obliged to prove their holding strategy. There is no specification on the required holding time.

Notable initiatives: “Blockchain for Europe” represents international blockchain industry players at the EU level, with a primary focus on participation in the regulatory debate. HIVE Blockchain Society is a nonprofit blockchain association whose aim is to promote the understanding of distributed ledger technology and to inform the Belgian and international community about its developments.

Local players: Keyrock, a company that develops crypto-asset financial infrastructure by means of scalable, self-adaptive algorithmic technologies, Credix, a decentralized credit marketplace powered by Solana blockchain technology, and Delta, a Bitcoin (BTC) and cryptocurrency portfolio tracker app.

France

Numbers: 160+ blockchain startups, $175.4 million (180 million euros) of fundraised revenue

Regulation and legislation: France established a friendly legal framework for ICOs in 2016, allowing issuers to register cash vouchers directly into the blockchain. In 2017, the Financial Market Authority (AMF) launched the digital-asset fundraising support and research program UNICORN. France also authorizes the registration and transfer of unlisted securities using blockchain technology.

Taxes: The country’s highest administrative court reduced the tax burden on profits coming from cryptocurrencies and set a flat rate tax of 30%.

Notable initiatives: The public Deposits and Consignments Fund makes direct investments in crypto projects. The fund has invested $292.3 million (300 million euros) in blockchain and AI in the European Commission’s Investment Programme for the Future.

Community self-organization: The French Digital Asset Association (ADAN) operates as a professional lobbying group on behalf of the industry.

Local players: Ledger, leading global cryptocurrency hardware wallet provider, Coinhouse, a crypto asset management and transaction services company, providing staking, saving and custody services, and Sorare, a fantasy football gaming platform that uses blockchain technology based on Ethereum.

Germany

Numbers: 343 blockchain startups

Regulation and legislation: Since 2013, virtual currencies have been the “units of account.” In 2020, Germany introduced the concepts of “crypto asset” and “crypto custody.” The latter requires a license from the supervisory body BaFin. Virtual currencies are not considered legal tender in the country and are generally treated as investment assets or so-called “substitute currencies.”

Taxes: In May 2022, Germany’s Finance Ministry has released new cryptocurrency tax guidelines with no tax payable on gains from BTC and Ether (ETH) sold 12 months after acquisition.

Notable initiatives: In September 2020, the Deutsche Energie-Agentur announced the launch of the Future Energy Lab. It involves, among other things, the pilot projects related to the application of blockchain technology in the energy sector, such as the Blockchain Machine Identity Ledger (BMIL) and the Smart Contract Registry. The BMIL is a digital and decentralized directory for device identities.

The same year one of the four electricity transmission system operators in Germany announced a multi-year strategic partnership with Energy Web that will focus on testing and validating the technological promises of blockchain-based solutions.

Community self-organization: Established in 2017, the Blockchain Bundesverband is a non-profit association with more than 60 members. The association’s initiatives focus on education for decision-makers and the wider public. Based in Munich, the European Blockchain Association provides an independent, neutral platform for blockchain-related communities and organizations to discuss, develop and elaborate on shared work.

Local startups: Iota Foundation develops an open-source protocol that supports data and value transfer between devices and humans, and BitsCrunch, a crypto-analytics company.

The Netherlands

Numbers: 160+ blockchain startups, $360.5 million (370 million euros) of raised funds.

Regulation and legislation: The central bank and the Dutch Authority for the Financial Markets (AFM) maintain a one-stop shop for regulatory information for startups called InnovationHub. There is also a regulatory sandbox for emerging technologies with a principles-based (rather than a rules-based) approach. Compliance is determined based on the intent of laws and regulations rather than their letter. A practice of partial authorizations, when a startup does not need to meet all the banking license criteria to obtain a license, is rather common.

Notable initiatives: During the COVID-19 pandemic, Tymlez launched a project to support the government’s transparency in medical supply chains through blockchain technology. There are projects in agriculture such as Blockchain for Agri-food, financed by the Dutch Ministry of Agriculture, Nature and Food Quality to improve supply chains.

Community self-organization: The report mentions meetup groups such as Blockchain Talks, Blockchain Netherlands, Food Integrity Blockchained, Permissionless Society Blockchains and Bitcoin Wednesday Amsterdam, as well as Ethereum Dev NL and Hyperledger Netherlands.

Local players: Bitfury provides mobile Bitcoin mining data centers, Aurus, a gold-backed cryptocurrency on the Ethereum blockchain, and Finturi, a blockchain-powered trade finance platform.

Switzerland

Numbers: $247.48 billion (254 billion euros) of the total valuation of the top 50 companies in 2021, 877 blockchain solution providers.

Regulation and legislation: In 2019, the Federal Council updated the existing framework conditions in relation to blockchain and crypto. In 2020, the Swiss Parliament passed the DLT blanket act, which selectively adapts 10 existing federal laws. In 2021, a license for DLT trading facilities was introduced.

According to the Financial Market Supervisory Authority (FINMA), digital currencies are categorized based on their function and purpose as payment tokens, utility tokens and asset tokens.

Taxes: Tax rules vary between the individual cantons. Digital currencies are generally treated as foreign currencies for the purposes of wealth taxation. Their exchange value is determined by the Federal Tax administration at the end of the year. Capital gains on digital currencies are exempt from income tax for individuals. Purchases with digital currencies are VAT exempt.

Notable initiatives: Blockchain has been used for issuing digital self-sovereign identities and even voting on the regional level, while digital currencies are accepted for paying taxes and public services. The city of Zug, the capital of the so-called “Crypto Valley,” launched its blockchain-powered digital identity program in 2017. In 2021, the Swiss government started a public discussion on self-sovereign identities on the national level. In 2022, the city of Lugano acknowledged Bitcoin and Tether (USDT) as legal tender.

Community self-organization: The Crypto Valley Association and Blockchain Federation are the major public entities for blockchain enthusiasts and entrepreneurs. There are also popular communities like the Swiss Association of Crypto Investors and the Bitcoin Association.

Local players: Switzerland by far exceeds all the other nations in the list when it comes to globally acknowledged crypto companies. It’s enough to mention that such players as Cardano, Polkadot, Cardano, Solana, Cosmos and Tezos are based in this country.

Key takeaways

Discussing the report takeaways with Cointelegraph, Nikolaos Kostopoulos, senior blockchain consultant at Netcompany-Intrasoft and member of the EU Blockchain Observatory and Forum team, compared the European regulatory dialogue to the one that takes place in the United States, highlighting the role of France:

“French regulators and policymakers are seemingly winning the course for a comprehensive, objective and holistic effort to establish the framework for a growing blockchain and digital assets industry. This effort is already validated by the decision of leading players such as Binance and Crypto.com which are heavily investing in their French HQ as their EU base, but also the fact that France is home to a few of the biggest EU blockchain startups.”

While France’s regulatory efforts stay in a larger EU context, Switzerland still leads the way in terms of attracting startups and creating the most welcoming legal environment for them. Kostopoulos believes that this unique position can’t simply be explained by the country’s century-old tradition as a safe haven for big money.

“There are numerous reasons that constitute Switzerland more advanced and progressive in comparison to countries such as Belgium or France. The country has established procedures, progressive financial legislation, human resources and infrastructure to support a framework to accelerate financial innovation,” he said.

Which countries are the worst for crypto taxation? New study lists top five

September 8, 2022 Coin Telegraph

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Crypto analytics firm Coincub has released crypto tax rankings, pointing out the worst and the best countries regarding crypto taxation.

Global cryptocurrency taxation rules significantly vary among countries, and some jurisdictions have come up with extremely tough crypto tax policies for their residents.

In a new study by crypto analytics firm Coincub, Belgium is referred to as the worst country in the world in terms of crypto taxation for residents. That is according to in-house rankings covering taxation aspects like taxes on crypto income or crypto capital gains.

Belgium is known for its massive 33% tax on capital gains on crypto transactions, and it also withholds up to 50% in taxes from professional income on crypto trades. As previously reported, Belgium adopted strict crypto taxation rules back in 2017.

Released on Thursday, Coincub’s tax rankings also bring up countries like Iceland, Israel, the Philippines and Japan as the locations less favorable to crypto investors.

In Iceland, any crypto gains up to $7,000 are subject to under 40% tax, while bigger gains will incur 46%, the report notes. Under Israel’s tax regime, the sale of crypto is usually subject to capital gains tax, which is up to 33%. On the other hand, if crypto trading involves a business income tax, it may go as high as 50%.

In the Philippines, there is no tax on any crypto income under $4,500, but after that, any income is taxed up to 35%. The country’s government has been also discussing new taxes on crypto by 2024, raising concerns that Manila may follow India’s lead and impose a 30% flat tax on all crypto income.

Japan closes the top-5 worst countries for crypto taxation for residents in Coincub's rankings. The country has a progressive tax rate system for income considered miscellaneous income. The tax rate varies from 5% to 45%, depending on the amount of total profits.

Among other strict crypto tax economies, Coincub also mentioned countries like India, Austria, the United States, Norway, Denmark and France.

On the other hand, the study pointed out a number of countries that provide tax-efficient incentives to citizens and have much more favorable crypto tax policies. According to the rankings, Germany tops the list as the best place for crypto investors, as anyone holding cryptocurrency for a minimum of a year will incur no capital gains tax on selling or converting their crypto. Other crypto-tax-friendly countries include Italy, Switzerland, Singapore and Slovenia.

Additionally, Coincub mentioned classic tax havens or countries that offer foreign businesses and individuals minimal to no tax liability for their financial deposits, where crypto is no exception. Among those, the study listed The Bahamas, Bermuda, Belarus, the United Arab Emirates, the Central African Republic, Lichtenstein and others.

Coincub emphasized that crypto taxation is very fast-changing as new regulations occur regularly. The firm also noted that there is an increasing number of countries that apply flat tax rates on gains for individuals, aiming to simplify tax take.

Belgian regulator reviews crypto asset classifications while awaiting harmonization

July 6, 2022 Coin Telegraph

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The Belgian Financial Services and Markets Authority created a chart to differentiate crypto asset securities, investment instruments and financial instruments.

The Financial Services and Markets Authority (FSMA), the Belgian regulator, is seeking comments on its communication on the classification of crypto assets as securities, investment instruments or financial instruments. Aimed at issuers, offerors and service providers, the agency’s communication will serve as guidance to the existing order until European regulatory harmonization is achieved.

The communication is meant to address frequently asked questions and is not exhaustive. It is accompanied by a stepwise chart to help its readers determine the classification of an asset.

Crypto assets that are incorporated into an instrument, as is generally the case for assets that are exchangeable or fungible, may be classified as securities under the European Union (EU) Prospectus Regulation or as investment instruments under the EU Prospectus Law. In those cases, MiFID (Markets in Financial Instruments Directive) rules of conduct apply.

If an asset has no issuer, as in the case of Bitcoin (BTC) or Ether (ETH), where the instruments are created by a computer code that does not give rise to a legal relationship, then in principle the Prospectus Regulation, Prospectus Law and MiFID rules do not apply. When the European Union Regulation on Markets in Crypto Assets (MiCA) takes effect, trading platforms will be required to issue white papers for issuer-less tokens.

The classification chart is straightforward, if not conclusive. An asset incorporated into instruments that represents the rights equivalent of a share in profits or losses or a payment is a security if it is transferable and an investment instrument if nontransferable. If the asset represents the right to delivery of a service or product, it is an investment instrument if it has investment characteristics, according to case-by-case analysis.

FSMA also warned that, regardless of the classification of an asset, it will be subject to additional laws as well, such as rules governing virtual asset service providers. Comments on the communication and chart are welcome through July 31.

Belgian Banking Group KBC Creates Blockchain-Based Coin

June 18, 2022 Bitcoin.com

Belgium Introduces Registration for Crypto Exchange and Wallet Service Providers

May 3, 2022 Bitcoin.com

Belgian financial regulator FSMA to regulate crypto exchange services

April 30, 2022 Coin Telegraph

belgium

Crypto service providers must fulfill seven conditions that include being constituted in the form of a company with a minimum capital of roughly $52,725 (EUR 50,000).

A new rule imposed by Belgium’s financial regulatory agency, the Financial Services and Markets Authority (FSMA), will now require crypto exchanges and custodial wallet services in the region to register within a sharp deadline.

Starting tomorrow, May 1, legal individuals and entities that wish to provide crypto exchange services or custodial wallets in Belgium will have to register in advance, according to the information released by the FSMA.

As from 1 May 2022, providers of exchange services between #virtual #currencies and legal currencies, or custody #wallet services will have to register with the #FSMA. Please consult the FAQs. https://t.co/P44mkovn5L pic.twitter.com/aAdtQ9Dqwx
— FSMA (@FSMA_info) April 29, 2022

Crypto businesses in Belgium that have been already operating before this official announcement are required by law to notify the FSMA of the “exercise of their activity” within the next two months, before July 1.

In addition to disclosing operations, existing businesses have been given four months, i.e., before Sept. 1, to register as a regulated business with the financial regulator.

To maintain active registration with the FSMA, crypto service providers are required to fulfill seven conditions that include being constituted in the form of a company with a minimum capital of roughly $52,725 (EUR 50,000).

The FSMA expects to process registration applications within three months, considering all required information has been provided. Upon successful registration, crypto service providers will receive a unique registration number, a.k.a. the company number, that must be used in all further interactions with the FSMA.

Belgium’s pro-crypto stance became evident at the start of 2022 when Brussels member of parliament Christophe De Beukelaer became the first European politician to convert his salary to Bitcoin (BTC).

As Cointelegraph previously reported in January, Beukelaer announced using the Bit4You crypto trading platform to convert his monthly salary of roughly $6,140 (EUR 5,500) to BTC.

During the revelation, Beukelaer shared his intent to inspire other politicians in the region to support the growing crypto economy.

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Austria

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France

Germany

The Netherlands

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Key takeaways

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