BTC, ETH, and other decentralized coins are not securities, according to Belgium.

Gary Gensler, the chairman of the U.S. Securities Exchange Commission, disagrees with Belgium’s position on the requirements that must be completed for a cryptocurrency asset to be considered a security.

Bitcoin (BTC), Ether (ETH), and other cryptocurrencies that are only issued by computer code do not count as securities, according to Belgium’s financial regulatory authorities.

The justification was provided in a report published on November 22 by Belgium’s Financial Services and Markets Authority (FSMA), a draft of which was made available for comment in July 2022.

The clarification follows an upsurge in inquiries, according to the FSMA, about how Belgium’s current financial laws and regulations relate to digital assets.

The FSMA declared that under its “stepwise strategy,” cryptocurrencies would be classified as a security if they were issued by an individual or company, even though this was not legally binding under Belgian or EU law:

“The Prospectus Regulation, the Prospectus Law, and the MiFID rules of conduct do not in principle apply if there is no issuer, as in situations where instruments are created by computer code and this is not done in execution of an agreement between issuer and investor (for example, Bitcoin or Ether).”
The Belgian regulatory agency emphasized that even while cryptocurrencies are not considered securities, they may nonetheless be governed by other laws if they are used as a medium of exchange by a business:

“However, further restrictions may apply to the instruments or the persons who provide certain services related to those instruments if the instruments have a payment or exchange function.”
The FSMA also stated that its step-by-step approach is technology-neutral, implying that it makes no difference whether digital assets exist and are enabled on a blockchain or through other conventional methods.

The paper was first developed by the FSMA in July 2022 in an effort to respond to frequently asked issues from issuers, offerers, and service providers of digital assets with a base in Belgium.

The Markets in Crypto Assets Regulation (MiCA) of the European Parliament is anticipated to be adopted and go into effect at the beginning of 2024, but FSMA noted that the stepwise plan will act as a guide until then.

Belgium’s straightforward regulations contrast with the “regulation by enforcement” strategy used by the U.S. Securities Exchange Commission (SEC), which is currently competing with the U.S. Commodity Futures Trading Commission for regulatory authority over digital assets (CFTC).

Gary Gensler, the head of the Securities and Exchange Commission, has always seen bitcoin as a commodity, but he recently suggested that post-Merge ETH and other staked currencies would qualify as securities under the Howey test.

According to a recent survey by blockchain data platform Chainalysis, Belgium ranks 94th in the world in terms of the adoption of cryptocurrencies. Belgium hasn’t been a big user of digital assets up to this point.

According to information from the cryptocurrency data site Bitrawr, residents of the European nation have access to 10 cryptocurrency exchanges.

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