The Belgian financial policeman, the Financial Services and Markets Authority (FSMA), has published a document in which it specifies that BTC and ETH are not to be considered as transferable securities. Moreover, the consensus of a blockchain has no influence in this plan for judging the classification of a cryptocurrency.
ETH and BTC are not securities
The Financial Services and Markets Authority (FSMA), which is the equivalent of the AMF in Belgium, has published a clarification on how to classify digital assets. In view of the elements present in this document, Bitcoin (BTC) and Ether (ETH) cannot be classified as securitiesas are company shares, for example.
This contrasts with the comments of Gary Gensler, the chairman of the Securities and Exchange Commission (SEC). Indeed, the latter had implied that ETH was a security since its move to proof-of-stake (PoS).
While he hadn’t explicitly cited ETH, he had said on Merge Day that digital assets operating by a PoS model allowed stakers to know their performance in advance. He therefore believes that may correspond to Howey’s testwhich is a test to judge the classification or not in securities.
But the approach of the FSMA is different, according to it, it is rather necessary to go to the source, in the way a cryptocurrency is issued :
“If there is no issuer, as in cases where the instruments are created by computer code and that is not made 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. »
? To go further – Find our guide to buying Bitcoin (BTC)
A technologically neutral approach
The FSMA was particularly clear in the introduction to its plan, stipulating that its approach was not influenced by the underlying technologythus excluding the debate “proof of work/proof of stake» :
“The phased plan is technology-neutral. The qualification as a security, a financial instrument or an instrument investment does not depend on the technology used. »
All this does not mean that BTC and ETH are exempt from rules, but these will differ depending on how the players in the ecosystem will use these assets.
Otherwise, some cryptocurrencies are indeed to be interpreted as securities. The plan presented lists, among other things, three particularly explicit conditions to which many projects are attached:
“The funds collected are used for the general financing of the transmitter and the service or the project is not yet developed. The instruments are used to remunerate staff. The issuer organizes several sales rounds at different prices. »
Thus, this clarification from the Belgian financial policeman is important, because as a European player, this understanding could serve as a reference in the Union.
? Also in the news – Is global cryptocurrency regulation in the works?
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Sources: FSMA, The Wall Street Journal
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I timidly discovered the world of blockchain at the end of 2018 during my quest for financial freedom. Initially invested moderately, it was only two years later that I took the gamble of betting everything on the movement that was taking shape then. I then dedicate 2021 to training myself better to acquire more knowledge and seriousness. As I often like to say: I still have a billion things to learn. And what I do know, I want to share with you.
Vincent Mayor
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