The Financial Services and Markets Authority (FSMA) warns the public that neither OneCoin nor the persons promoting OneCoin have been recognized or authorized by the FSMA. The FSMA once again warns the public of the risks associated with virtual currencies.
Certain people have recently been promoting OneCoin, said to be a virtual currency based on cryptography, in Belgium. The FSMA wishes to warn the public that OneCoin has not received any form of recognition whatsoever from the FSMA. The same is true of the persons who are promoting OneCoin: they do not hold an authorization or any other form of recognition from the FSMA. Generally speaking, there are no specific rules governing virtual money that the FSMA could enforce.
Hence the claims made public by Mr Laurent Louis’ on his Facebook page, namely, that the FSMA had stated that it “n’avait rien trouvé à redire sur le OneCoin” (unofficial English translation, “ that it had nothing to say about OneCoin”) and that “pour la FSMA, le OneCoin ne pose aucun problème et n’est nullement illégal ni une arnaque” (unofficial English translation, “for the FSMA, OneCoin does not pose any problems and is neither illegal nor a fraud”) are false and misleading. These claims suggest or imply that the operations in OneCoin are carried out under conditions laid down by the laws and regulations which the FSMA enforces, whereas in fact these laws and regulations do not apply to such operations.
The FSMA wishes to remind the public of its warnings, issued jointly with the National Bank of Belgium (NBB) in January 2014 and in April 2015, and emphasizes that the risks associated with the use and the holding of virtual money such as Bitcoin which are mentioned in that warning are still relevant. The most important risks are the following:
- The internet environment where virtual money is held and traded entails various risks: the trading platform or digital wallet may be hacked and the owner may lose his or her virtual money.
- The operational reliability (and in particular, the risk of fraud) of such systems has not yet been formally assessed by the regulators.
- In contrast to the situation for electronic money, fluctuations in the exchange rate of virtual money can result in substantial financial losses. Virtual money therefore entails a significant exchange rate risk: the rate at which virtual money can be exchanged for official currencies (such as the euro) is highly variable. Those variations can take place in a very short time (one day). Since December 2013, Bitcoin has lost 80% of its value against the euro.
- In contrast to the situation for electronic money, there is no legal guarantee that virtual money can be exchanged at any time at its original value.
- Virtual money is not legal tender: no one is obliged to accept payment with virtual money.
- In principle, money held in a savings account or invested in savings notes or term deposits is protected by government guarantee up to € 100,000 per financial institution and per person. There is no such protection for investments in virtual money.
Other authorities, in particular the European Banking Authority, have also issued similar warnings against virtual money.