• The Financial Services and Markets Authority (FSMA) of Belgium is introducing a new regulation to oversee crypto advertisements beginning May 17, 2023.
• The new rules are designed to address virtual assets as a means of exchange or payment and protect consumers from misleading ads or scams.
• Advertisers must alert the FSMA 10 days prior to posting an ad, include warnings about the volatile nature of digital assets, and retain their materials for at least one year.
FSMA To Monitor Crypto Ads in Belgium
The Financial Services and Markets Authority (FSMA) of Belgium has announced a new regulation that will come into effect on May 17th, 2023 in order to oversee crypto advertisements in the country. This follows the European Union’s adoption of crypto-focused legislation aimed at providing a legal framework for cryptocurrencies.
What Does The Regulation Entail?
The regulation is designed to address virtual assets as a means of exchange or payment, such as Bitcoin (BTC) or Ethereum (ETH). Assets with only a utility function or serve as securities are excluded from this rule. Advertisers must alert the FSMA 10 days prior to posting an ad, include warnings about the volatile nature of digital assets, and retain their materials for at least one year.
Why Is This Regulation Necessary?
The regulation is necessary because cryptocurrencies are considered a risky investment asset by regulators worldwide, especially popular among younger investors. As such, this rule aims to protect Belgian investors from misleading advertisements and scams while ensuring that businesses operating in crypto follow necessary regulations when it comes to marketing their products or services.
What Are The Penalties For Violating This Regulation?
Those who violate this regulation may face fines up to €5 million or 2% of their total global turnover depending on which is greater. Additionally those found guilty may be temporarily suspended from engaging in certain activities related to cryptocurrency trading activities such as public offerings for up two years after being convicted for violating these rules.
Conclusion
The new regulations put forth by FSMA seeks to provide more clarity around cryptocurrency investments and ensure consumer protection within the space. By requiring advertisers to alert them before posting an ad and including warnings about volatility within the content it creates more transparency for potential investors looking into investing into digital currencies in Belgium.