Belgium declares that BTC, ETH and other decentralized coins are not securities

Belgium's view on the conditions that must be met for a crypto asset to be classified as a security contrasts with views American Securities Exchange Commission Chairman Gary Gensler.

The Belgian financial regulator has confirmed its position that Bitcoin (BTC), Ether (ETH) and other cryptocurrencies issued solely by computer code do not constitute transferable securities.

The explanation came from the Belgian Financial Services and Markets Authority (FSMA) in a November 22 report, a draft of which was opened for comment in July 2022.

The clarification follows an increase in requests for answers on how current Belgian financial laws and regulations apply to digital assets, according to the FSMA.

While not legally binding under Belgian or European Union law, the FSMA said that under its "step plan" cryptocurrencies would be classified as a security if they were issued by a person or entity":

"If there is no issuer, such as in cases where the instruments are created by computer code and this is not done pursuant to an agreement between the issuer and the investor (e.g. Bitcoin or Ether), then in principle the Prospectus Regulation, the Prospectus Law and the MiFID Rules of Conduct do not apply.”

The Belgian regulator noted that cryptocurrencies that are not classified as securities may still be subject to other regulations if a business uses the digital asset as a medium of exchange:

“However, if the instruments have a payment or exchange function, other regulations may apply to the instruments or to the persons who provide certain services relating to these instruments.”

The FSMA also noted that its phased plan is technology-neutral, suggesting that it is irrelevant that digital...