Belgium to introduce new rules for crypto ads
New rules governing advertisements for virtual currencies will enter into force in less than two months in Belgium. The rules are intended, among other things, to ensure that the risks associated with virtual currencies are sufficiently prominent in such advertisements.
The Financial Services and Markets Authority (FSMA) will supervise compliance with those rules.
In addition, the FSMA will be investing more in financial education about virtual currencies.
The FSMA requested and was granted a new power by the government to regulate advertisements for virtual currencies.
The regulator issued a Regulation to this end that was published on 17 March 2023 in the Belgian Official Gazette (Moniteur belge/Belgisch Staatsblad) and will enter into force on 17 May 2023. The Regulation has three main aspects:
- The basic principle that advertisements must be accurate and not misleading
- Advertisements must contain mandatory information that points out the risks
- Mass media campaigns must be notified to the FSMA in advance
The Regulation sets out conditions that all advertisements must meet. So, for example, advertisements may not emphasize the potential advantages without also providing an accurate indication of the risks, limitations or conditions. Nor may advertisements contain any statements about the future value or return, and must be written in comprehensible language.
In addition to these conditions, advertisements must also contain a short warning:
‘Virtual currencies, real risks. The only guarantee in crypto is risk.’
All advertisements must also contain a broader warning or a link or reference to such a warning. The broader warning should sum up the various risks in greater detail.
Lastly, mass media campaigns must be notified to the FSMA at least ten days in advance. Mass media campaigns are campaigns that disseminate advertisements to at least 25,000 consumers. The prior notification is intended to enable the FSMA to intervene, if necessary, before the campaign actually begins.
The FSMA is also working on a new game module for the Wikifin Lab, its financial education centre. The module is intended to make young people aware of the risks associated with virtual currencies. A first draft of the new module is currently being tested; it will be launched at the beginning of the next school year.
‘Some consumers want to earn money quickly by trading in virtual currencies. This goes hand in hand with great risks. In order to better protect consumers, the FSMA is stepping up the pace when it comes to supervision and financial education,’ says Jean-Paul Servais, Chairman of the FSMA. ‘Thanks to the new Regulation, the FSMA will be able to check whether advertisements for virtual currencies are accurate and not misleading, and whether the advertisements contain the compulsory warnings of risk.’