Belgium’s financial police, the Financial Services and Markets Authority (FSMA), has published a document stating that Bitcoin (BTC) and Ether (ETH) are not to be considered transferable securities. Moreover, the blockchain consensus has no influence on this plan to consider the classification of cryptocurrency.
ETH and BTC are not securities
The Financial Services and Markets Authority (FSMA), Belgium’s equivalent of the AMF, has published clarification on how to classify digital assets. Given the features present in this document, Bitcoin (BTC) and Ether (ETH) cannot be classified as securitiesas are company shares, for example.
This is in contrast to the views of Gary Gensler, the chairman of the Securities and Exchange Commission (SEC). Indeed, the latter he implied that ETH was a security since moved to proof of stake (PoS).
Although he didn’t specifically mention ETH, he did say so on Merger Day digital assets that operate according to the PoS model let stakeholders know their performance in advance. He therefore believes that it is it may meet the Howey testwhich is a test to assess the classification or not in securities.
But the approach of the FSMA is different, according to him, it is necessary to go to the source. the way 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 (eg Bitcoin or Ether), then in principle that the Prospectus Regulation, the Prospectus Law and the MiFID conduct rules do not apply. »
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A technology neutral approach
The FSMA was very clear in the introduction to its plan, saying that his approach was not influenced by the underlying technologytherefore excluding the debate “proof of work/proof of stake»:
“The phased plan is technology neutral. The qualification as a security, financial instrument or 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 lists, among other things, three specific explicit conditions that many projects are attached to:
“The funds raised are used to finance the transmitter in general and the service and the project have not yet been developed. The instruments are used to reward the staff. The issuer organizes several rounds of sales at different prices. »
Therefore, this clarification from the Belgian financial police is important, because as a European player, the understanding could serve as a reference in the Union.
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Sources: FSMA, The Wall Street Journal
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