Belgian Financial Services and Markets Authority clarifies the characterisation of crypto-assets | Hogan Lovells

Through a communication dated November 22, 2022, the Belgian Securities and Markets Authority (FSMA) has provided clarification on the most common situations in which crypto-assets may fall within the scope of the prospectus rules and/or MiFID conduct rules. The FSMA has created a decision tree, which can help with the classification of crypto-assets such as securities, investment instruments or financial instruments.

Due to an increased interest in crypto-assets in Belgium, the FSMA has often been involved in discussions on the legal and regulatory nature of crypto-assets and services related to crypto-assets.

The FSMA notes in the communication that market players are mainly seeking clarity on when crypto-assets may be classified as a security within the scope of the EU Prospectus Regulation or as an investment instrument within the scope of the Belgian Prospectus Act (supplement to the Regulation EU Prospectus). Depending on the asset classification, other laws may also apply, such as MiFID rules, virtual asset service provider regulations or other laws.

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Step plan

FSMA has developed a step-by-step plan (accessible here). In its plan, FSMA focuses on the main questions and situations that have been encountered most to date. However, it does not cover all potential categories. The scheme is technology neutral as FSMA believes that designation as a security, financial instrument or investment instrument does not depend on the technology used.

Possible legal feature of crypto-assets

The following features are possible if a crypto asset publisher is included in the tools:

  • Characterization of crypto-assets as securities: if the crypto-assets are transferable instruments and represent the right to share in the profits or losses of a project and potentially the right to vote, or the right to pay an amount of money or its equivalent, these crypto-assets are, as a rule, defined under the European Union Prospectus Regulation as safety is considered.
  • Characterization of crypto assets as financial instruments: If crypto-assets are transferable instruments and represent the right to share in the profits or losses of a project and potentially the right to vote, or the right to pay an amount of money or its equivalent, these crypto-assets are also considered financial. instruments to comply with MiFID conduct rules.
  • Characterization of crypto assets as investment tools: if the crypto-assets are immovable instruments and represent the right to share in the profits or losses of a project and potentially the right to vote, or the right to pay an amount of money or its equivalent, these crypto-assets are classified. in principle as investment instruments under the Belgian Prospectus Act. In addition, if crypto-assets represent the right to deliver a service or product by the issuer and have an investment objective, the instruments are, as a rule, classified as investment instruments within the scope of the Belgian Prospectus Act.
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Where crypto-assets qualify as securities, investment instruments and/or financial instruments, FSMA stipulates that in addition to meeting the relevant requirements of the EU Prospectus Regulation, the Belgian Prospectus Act and/or the MiFID rules, other laws may also apply. bring , such as rules governing market or crowdfunding.

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