The Belgian government has tasked its financial regulatory body to ensure that cryptocurrencies are advertised with sufficient warnings of the risks associated with them. New rules, set to come into effect this May, will require that investors are made aware of the potential risks.
Belgian Financial Services and Markets Authority to Introduce Prudent Crypto Advertising Rules
The Financial Services and Markets Authority (FSMA) of Belgium has been authorized by the government to supervise cryptocurrency-related advertising. The new regulations, which are set to be enforced in less than two months, require that the risks involved in virtual assets are adequately highlighted in such advertisements. A related regulation, published by the FSMA in the Belgian Official Gazette on March 17 and due to take effect on May 17, 2023, states that crypto ads must be accurate and not misleading.
It also mandates that the FSMA is notified ahead of mass media campaigns, those disseminating ads to a minimum of 25,000 consumers. This would grant the regulatory body the option to intervene prior to the commencement of such campaigns, if needed.
“Advertisements may not emphasize the potential advantages without also providing an accurate indication of the risks, limitations or conditions. Nor may advertisements contain any statements about the future value or return, and must be written in comprehensible language,” the authority emphasized.
In addition, crypto ads must contain a “short and punchy warning” that reads: “Virtual currencies, real risks. The only guarantee in crypto is risk.” Furthermore, they should incorporate, reference, or link to a comprehensive warning presenting all the risks in detail.
The FSMA is also focusing on financial education about digital assets. It is currently producing a series of videos about virtual currencies targeting youngsters. These videos are a component of an educational package that also includes an information sheet for teachers and a quiz for students.
The financial authority’s regulatory action follows after Belgium’s former Minister of Finance, Johan Van Overtveldt, recently urged governments to prohibit cryptocurrencies amid a banking crisis involving two crypto-friendly banks. It also follows the publication of an article in which the head of the Dutch monetary regulator guaranteed stringent treatment of crypto businesses under the EU’s Markets in Crypto Assets (MiCA) law.
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