FAQ about crypto

Distribution means 'presenting a product or a virtual currency, in any way whatsoever, with a view to encouraging an existing or potential client to purchase, subscribe to, enter into, accept, sign up for or open the product or currency in question'.

Distribution is a broad concept. The following situations, for example, constitute distribution:

• a person holds virtual currencies and advertises them for the purpose of selling to consumers;
• a service provider makes an infrastructure available to consumers that enables them to invest in virtual currencies (e.g. a trading platform) and advertises investment in virtual currencies either via its own communication channel (e.g. the service provider’s website allowing transactions to be carried out on a platform), or via another communication channel (e.g. newspaper website or social media);
• an influencer proposes a virtual currency to consumers with a view to encouraging them to purchase it and receives remuneration from a trading platform for doing so.

No, the Regulation applies to anyone who, in return for some form of remuneration or advantage, distributes virtual currencies to consumers and disseminates advertisements for the purpose, regardless of whether this constitutes their core professional activity or an ancillary activity, or is done on an occasional basis for remuneration. An influencer who only sporadically advertises a virtual currency in return for remuneration falls within the scope of the Regulation.

The Regulation does not apply to communications disseminated on the occasion of transactions between consumers, on condition that no one is paid to disseminate advertisements among consumers.

The FSMA has drawn up this Regulation to protect consumers. This is the reason for its broad scope.

Distribution within Belgian territory means the distribution is addressed specifically to consumers in Belgium. This is a factual question and is assessed on the basis of evidence such as:

• reference to contact persons in Belgium;
• the absence of a disclaimer indicating that the distribution is not addressed to the Belgian public;
• the language(s) used;
• the possibility for consumers in Belgium to register online;
• the use of a website with a domain name that ends in '.be';
• the presence of a place of business or service provision in Belgium, or the use of an intermediary or influencer active in Belgium;
• the use of an image of a person who is well known to the Belgian public, such as athletes, artists or other celebrities;
• disseminating reputation marketing advertisements in Belgium;
• the fact that a social network is paid to display the advertisement specifically to the public in Belgium.

Each case is assessed on the basis of a specific analysis that takes all the facts into account. The presence of one of the above-mentioned factors does not automatically mean that this is a case of distribution on Belgian territory.

Distribution in Belgium is always involved if an advertisement is disseminated via the Belgian media or via a physical advertising medium (such as a billboard) within Belgian territory.

Advertisements for which no connecting factor with Belgium can be demonstrated do not come under the Regulation, even though consumers in Belgium may become aware of them. Thus, advertisements that are disseminated worldwide, where no specific link to Belgium can be demonstrated, are not targeted.

An advertisement is defined as 'any communication that is specifically intended to promote the purchase of or subscription to one or more virtual currencies, regardless of the channel by which or the manner in which this is done'.

Advertisements can be disseminated, for example, via a physical medium (such as a billboard), via a radio or television spot, as well as online (e.g. via a website or social media). They include both written text and audio and video communications.

The concept is broadly defined and covers not only advertisements in the strict sense of the word, but also the content of a service provider’s website that is set up in order to encourage consumers to purchase virtual currencies.

Educational material may in certain cases also be considered advertisements if the material is intended to encourage consumers to buy virtual currencies. This has to be assessed on a case-by-case basis.

The Regulation does not apply to advertisements for reputation marketing. Reputation marketing ads are advertisements that are intended to enhance the general name recognition of a cryptoplatform, for example. A condition is that they do not refer to one or more virtual currencies or a category of virtual currencies.

If an advertisement is limited to mentioning the name or logo of a service provider (e.g. advertisements on a sports club’s shirts sold on a trading platform), then this is considered reputation marketing.

However, if the advertisement refers to a specific virtual currency or to virtual currencies as an investment category (e.g. 'buy virtual currencies', 'invest in virtual currencies', 'take your first steps as an investor in virtual currencies'), this constitutes an explicit encouragement to acquire virtual currencies and therefore the Regulation applies, even if this is the name or logo of a service provider.

Please note, running advertisements for reputation marketing in Belgium may well be an indication that a service provider is distributing virtual currencies through its platform to consumers in Belgium. See the FAQ 'When do we speak of distribution within Belgian territory?' in this regard. If virtual currencies are distributed in Belgium, then the Regulation does not apply to the advertisements for reputation marketing, but it does apply to the website and the app used to operate the platform.

A virtual currency is a digital representation of a value that is neither issued or guaranteed by a central bank or public authority, nor necessarily linked to a legally issued currency and does not have the legal status of a currency or money, but which is accepted by natural or legal persons as a means of exchange and can be transferred, stored or traded electronically.

Only those virtual assets that function as a means of exchange or payment are therefore covered. Assets with only an investment function (such as ‘security tokens’, which, for instance, confer rights to an interest in a company) or a utility function (such as ‘utility tokens’, which confer rights to future products or services) are excluded. The Regulation does not apply to digital assets that are unique and not exchangeable amongst themselves.

The Regulation does not apply to the distribution of virtual currencies that are investment instruments as defined in Article 3 of the Law of 11 July 2018 on offers to the public of investment instruments and the admission of investment instruments to trading on a regulated market.

The FSMA has published a Communication containing a stepwise plan that serves as a guideline for the classification of crypto-assets as an investment instrument.

If a crypto-asset is classified as an investment instrument, then in principle there is an obligation to publish a prospectus or information note when offering it to the public. There are also specific rules governing advertisements, which in the case of an offer to the public must also be approved before they may be disseminated.

Article I.1, first paragraph, 2° of the Code of Economic Law sets out who qualifies as a consumer. According to that Article, a consumer is 'a natural person who is acting for purposes which are outside his or her trade, business, craft or profession.'

This means that consumers must be able to identify clearly that certain types of information constitute an advertisement. The attention of the consumer must be drawn to the fact that he or she is dealing with an advertising message that is intended to encourage him or her to buy. This can be done, for example, by including the word ‘advertisement’ (or equivalent) in a highly visible manner in the information.

No. Both the short and the extended risk warning must be included word for word. There is no margin to reformulate or summarize the contents of the warning.

If the form of the advertisement does not permit, for technical reasons, the inclusion of the extended risk warning (and only in such cases!), the advertisement must contain a link or other reference (e.g. a QR code) to a medium which contains the extended risk warning.

A link cannot be used, therefore, on grounds that the extended risk warning would detract from the attractiveness of the advertisement.

The short warning and the link must be included in every advertisement, even if it is very limited in size or duration (e.g. a banner or short video). If it is impossible for technical reasons to include the short warning and the link, then you cannot use this type of advertisement.

A distinction is made between advertisements that are part of a mass media campaign, and other advertisements that are disseminated on a smaller scale.

A mass media campaign is one where advertisements are disseminated to at least 25,000 consumers. 
The following are unquestionably regarded as mass media campaigns:

• advertisements that are visible from the public road or on a publicly accessible infrastructure (e.g. stadiums or metro stations);
• advertisements that are posted on a website by the site’s operator or by another person (e.g. on a forum);
• advertisements that are disseminated via a social network by a person who has at least 25,000 followers on that network at the beginning of the dissemination or by a person who pays that network for their dissemination.

Advertisements intended for use in a mass media campaign must be notified in advance to the FSMA.
The FSMA has published a Communication that outlines the procedures for fulfilling the notification requirement. Notification to the FSMA must be made 10 calendar days before the date of the dissemination of the advertisement. There is no mandatory approval by the FSMA. If no response is received from the FSMA within 10 days, this cannot be considered an implicit approval by the FSMA.

If the dissemination of the advertisements takes place outside the context of a mass media campaign, then there is no notification requirement and the FSMA carries out ex post supervision only.

Under no circumstances may the advertisement mention any action taken by the FSMA.

No. The advertising rules apply both to advertisements that are disseminated to consumers as part of a mass media campaign and to advertisements disseminated outside the context of a mass media campaign. All advertisements for virtual currencies that are disseminated to consumers must abide by the advertising rules.

The distinction between a mass media campaign and other forms of advertising than mass media campaigns is relevant only to the application of the obligation of prior notification of advertisements to the FSMA.

If the same advertisement is disseminated via various social media channels, then the threshold of 25,000 consumers is to be calculated by adding up the number consumers to be reached by the various channels used for the mass media campaign (e.g. 10,000 followers on Facebook and 17,000 followers on Instagram > 25,000 consumers).

The transitional regime applies to advertisements that have already been disseminated before the entry into force of the Regulation and that are still underway after a period of one month after the entry into force.

These advertisements must be brought in line with the Regulation within one month of the entry into force of the Regulation.

This transitional regime may apply, namely, to websites for cryptoplatforms or influencers who, at the time of the entry into force of the Regulation, were addressing Belgian consumers.

The obligation of prior notification does not apply to changes to those advertisements made within the period of one month that are intended to bring the advertisement in line with the Regulation.

No. This obligation applies both in cases where advertisements are disseminated as part of a mass media campaign that must be notified to the FSMA and in cases of dissemination where no notification has to be made to the FSMA.

The obligation applies to every contract entered into for the dissemination of advertisements, and in particular to:

• contracts between a cryptoplatform and a person (e.g. an influencer) who disseminates advertisements for the acquisition of virtual currencies via the platform;
• contracts between the person who disseminates the advertisement and the person whose image is used in the advert and who receives payment in return.

If the FSMA identifies an infringement of the provisions of the Regulation, it may, as provided for in Article 36 of the Law of 2 August 2002, order the person responsible for the advertisement to remedy the situation or to publish a correction. If the person fails to comply and has been given a chance to be heard, the FSMA may itself publish a warning or correction or impose a penalty. In urgent cases, the FSMA may itself publish a warning without having first issued an order, provided the person has had a chance to be heard.

In order to carry out its supervisory tasks, the FSMA is authorized among other things to ask to receive any information and any document, in any form whatsoever, from any natural or legal person, and to gain access to any document.

If the FSMA identifies an infringement of the Regulation, it may, in accordance with Article 36, § 2 of the Law of 2 August 2002, impose an administrative fine on the perpetrator.