The Belgium government introduced mandatory regulation for any legal person established in Belgium wanting to provide exchange services between virtual currencies and legal currencies, or custody wallet services, within Belgium to register with the Financial Services Marketing Authority (FSMA) in advance. The new rule, applicable from May 1, was published by the FSMA website on April 29. FSMA is the financial regulatory authority in Belgium. The affected service providers mainly include Belgian or European companies, Bitcoin.com reported. The registration is subject to a minimum capital requirement of €50,000.
The providers operating before the specified date of May 1 will have to notify the FSMA about their activities before July 1, 2022 and apply for registration before 1 September 2022. Such crypto exchange service providers will have to notify the FSMA which will grant it provisional authorization for continuing operations until their registration requests are reviewed by the authority. The platforms which fail to comply with the new rule would be penalized with fines and prohibited to carry out their respective activities. The FSMA would also inquire about the identities of the shareholders and the persons in control of the platforms who must have the necessary management qualities.
In the FAQ section, FSMA clarified important information about the businesses that will be covered under the new law:
- The FSMA explains that the exchange service providers would entail all the entities carrying out purchase or sale transactions using their own capital.
- This includes the provider who acts as a counterparty to a deal, just like traditional currency exchange offices.
- The regulation will not target the platforms that serve as intermediaries in transactions between a client and a third party.
- However, the operators of automated teller machines (ATMs) for crypto-fiat exchange, will be considered as providers of exchange services for the purposes of the new requirements.
- The regulator defined custodial wallet services as services for the custody of private cryptographic keys on behalf of clients for the purpose of holding, storing, and transferring virtual currencies.
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