On May 17, 2023, the Financial Services and Markets Authority (FSMA), the financial market regulator for Belgium, will implement new regulations regarding the advertising of cryptocurrencies within its purview.
The FSMA highlighted that crypto ads need to give risk data when accounting for the benefit of cryptocurrency in the Belgian Official Gazette, which was published last Friday. A brief, snappy warning as well as a "broader warning or a link or reference to such a warning" must be included in these advertisements.
Also, the regulator defined a mass campaign as any advertising effort in which businesses aim to reach at least 25,000 people.
Chairman of FSMA, Jean-Paul Servais said in a statement:
"Some consumers want to earn money quickly by trading in virtual currencies. This goes hand in hand with great risks. In order to better protect consumers, the FSMA is stepping up the pace when it comes to supervision and financial education. Thanks to the new Regulation, the FSMA will be able to check whether advertisements for virtual currencies are accurate and not misleading and whether the advertisements contain the compulsory warnings of risk."
A study that asked 1000 investors in November 2022 led to the regulatory action against the pervasive cryptocurrency advertisements. According to IPSOS market study, which the FSMA funded, 80 percent of cryptocurrency investors are men. However, just 7% of poll respondents claimed they would never trade cryptocurrencies as a result of the protracted "crypto winter" and the demise of FTX. This indicates that the events had little influence on Belgians' perceptions of the market.
Just 15% of investors purchased virtual currencies worth more than EUR 10,000, thus the quantities transacted in them are lower than in traditional assets.
Servais said:
"These figures are useful to help guide the FSMA's actions, they also indicate the usefulness of the FSMA's approach and strengthen its resolve to continue to take a proactive attitude in this area,' concludes Jean-Paul Servais."
A cryptocurrency ban has also recently been demanded by Belgium's foreign minister, who referred to cryptocurrencies as "speculative poison [with] no economic or social added value."
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
The FSMA of Belgium is renowned for its stringent market laws and financial industry supervision. Contracts for Differences (CFD) contracts, which are otherwise severely impacted on many other regional markets, are not offered or sold in any other European country. It recently alerted authorities to roughly 20 phony platforms and copycat websites selling sophisticated financial products illegally in the nation.
The FSMA also demanded registration from all domestic virtual currency service providers last year, including exchanges and wallet providers. The cryptocurrency firm must also report their operations to the market supervisor.
As this is going on, other regulators both inside and outside of Europe are enforcing severe regulations on cryptocurrency advertising. The UK's advertising watchdog has reported and removed many firms' cryptocurrency advertisements, including one from a well-known football team. The government of Thailand, South Africa, and India also required risk disclaimers in cryptocurrency advertisements.