Belgian Regulatory Body Argues Against ETH, BTC, and Other Coins Being Securities

Belgian politician holding up giant Ethereum and Bitcoin coins
  • Belgium’s Financial Services and Markets Authority (FSMA) said that crypto assets created by computer code like ETH and BTC are not securities.
  • FSMA clarified that such cryptocurrencies might be subject to other types of regulations if they have payment or exchange features.
  • FSMA also said that its stepwise plan will provide guidelines for the European Parliament’s Markets in Crypto Assets Regulation (MiCA) until adoption. 

Belgium’s financial regulatory body FSMA provided arguments for why it thinks Ethereum (ETH), Bitcoin (BTC), and other decentralized crypto assets aren’t securities.

FSMA’s main argument is called the stepwise plan, laid out in a document released on November 22. Essentially, it relies on the notion that crypto assets created by computer code, like ETH or BTC, do not constitute securities.

“If there is no issuer, as in cases where instruments are created by a computer code and this is not done in execution of an agreement between issuer and investor (for example, Bitcoin or Ether), then in principle the Prospectus Regulation, the Prospectus Law and the MiFID rules of conduct do not apply,” the document read.

However, FSMA clarified that such assets can be subject to other types of regulations. This is providing they feature payment or exchange functions.

“Nevertheless, if the instruments have a payment or exchange function, other regulations may apply to the instruments or the persons who provide certain services relating to those instruments,” it said.

Under FSMA’s stepwise plan, crypto assets issued by an individual or entity and incorporated into “instruments” will likely be classified as securities.

“If the assets are incorporated into an instrument, then it is possible to distinguish between a situation in which an instrument represents a right in respect of an issuer and/or another person (such as a guarantor) and a situation where this is not the case”, FSMA said.

FSMA also said that qualifying something as a security, financial, or investment instrument “does not depend on the technology that is being used.”

FSMA’s stepwise plan will provide guidelines for the European Parliament’s Markets in Crypto Assets Regulation (MiCA) until adoption. MiCA is still in the works and is expected to be ratified at the beginning of 2023. This would mean regulations will take effect in 2024.

FSMA’s arguments on ETH and BTC not being securities are in contrast to what the U.S. Securities and Exchange Commission chairman thinks. While Gary Gensler believes BTC is a commodity, he’s said numerous times that ETH is a security. This is especially after it implemented a proof-of-stake consensus mechanism.

This is in contrast to the views of U.S. Commodity Futures Trading Commission (CFTC) Chairman Rostin Behnam. He repeatedly said both ETH and BTC are commodities in his view.

On the Flipside

  • It’s unclear whether legislators will agree with FSMA’s view and include it in MiCA.

Why You Should Care

Regulations to the crypto industry are coming, whether one likes it or not. Labeling Ethereum (ETH) and Bitcoin (BTC) commodities rather than securities would be a huge win for the crypto community.

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed to be financial legal or tax advice. Trading Forex, cryptocurrencies, and CFDs poses a considerable risk of loss


Rue Abernai is a blockchain content writer focused on Web 3.0 domains, DeFi, and Ethereum Layer-2s. Rue believes blockchain technology has the potential to transform how we see and interact with society, economy, and culture. Rue spends his spare time hiking, playing with his dog, and reading. He has been active in blockchain and cryptocurrencies since 2020.