Advertising virtual currencies: Belgium introduces new rules

On 17 May 2023, new rules governing advertisements for virtual currencies will come into force. These rules aim to ensure that the risks associated with virtual currencies are sufficiently highlighted in such advertisements. The Financial Services and Markets Authority (FSMA) will monitor compliance with these rules.

On 5 January 2023, the FSMA issued a regulation imposing restrictive conditions on the marketing of virtual currencies to consumers.

1. Rationale

There were various reasons for the adoption of this regulation, including (a) the involvement of influencers in the promotion of certain cryptoassets, (b) their inherent risks and (c) their volatility.

a. Intervention by influencers

Undoubtedly, virtual currencies are extensively promoted amongst the general public and have gained immense popularity as an investment vehicle. Consumers engage in buying or selling cryptocurrencies for speculative purposes, with a view to making a substantial profit on the currency’s price.

Virtual currencies are not only advertised through traditional marketing channels but also through social networks or applications such as Tik Tok or Instagram. In certain cases, public figures (influencers) are engaged and remunerated for promoting virtual currencies to their followers.

These personalities (such as artists or top sportsmen), often lacking any specialized qualifications in financial matters, employ their fame as a commercial tool. Such promotions are aimed at the general public and, as such, consumers. Notably, specific categories of people, including minors, may be targeted despite their vulnerability.

b. Characteristics and risks of cryptocurrencies

In addition, virtual currencies have characteristics that make them a potentially risky investment object for the following reasons :

(i) Decentralised virtual currencies, such as Bitcoin or Ether, lack an underlying asset with intrinsic economic value or an underlying income stream, making them susceptible to sudden changes in value.

Furthermore, they differ fundamentally from traditional financial assets and state currencies in terms of their economic characteristics. These currencies lack support from central banks and are not legal tender in any given territory.

However, certain other cryptoassets referred to as stablecoins, which aim to maintain a stable value, operate differently from decentralised virtual currencies and may have an underlying asset such as real-world assets (e.g. national currency) or other cryptoassets or virtual currencies. Nevertheless, the recent sharp fall in the US dollar-based TerraUSD has demonstrated that even stablecoins can be subject to significant risks and undergo abrupt changes in value.

(ii) Virtual currencies are vulnerable to illegal activity.

Numerous trading platforms or digital wallets have already been hacked, leading to the loss of virtual currencies traded or stored therein. Moreover, malicious actors targeting consumers due to their lack of knowledge and experience are widespread in the virtual currency market.

Virtual currencies are also widely used to circumvent money laundering regulations and finance illegal activities.

(iii) Virtual currencies present specific technical risks.

The very existence of a virtual currency necessitates constant maintenance, which is ensured by the ongoing operation of the blockchain. This operation may be accidentally interrupted.

Additionally, if the investor loses or has their login or password to access the virtual wallet where virtual currencies are stored stolen, access to the virtual currencies will be permanently lost.

c. Volatility

The very high volatility in the price of virtual currencies in late 2021 and early 2022 has resulted in significant losses for those who invested in them.

A significant proportion of these people are consumers who ‘jumped on the bandwagon’ when the market was high, influenced by the euphoric climate at the time.

2. Legal base

The promotion of virtual currencies to consumers, along with its accompanying advertising, has not been subjected to any framework at Belgian or European level, other than general regulations governing unfair commercial practices.

Marketing financial products must comply with specific and detailed rules, resulting from the MiFID Directive and the Prospectus Regulation at both Belgian and European levels.

Principally, these rules do not apply to virtual currency marketing, even though virtual currencies have a higher risk profile than most financial assets.

However, virtual currencies that serve as investment instruments are governed by the Law of 11 July 2018 on public offers of investment instruments and admissions of investment instruments to trading on regulated markets, and are excluded from the Regulation. Some cryptoassets are also financial instruments, and are, therefore, subject to MiFID legislation.

Nonetheless, their regulation was found inadequate.

In this context, the Law of 5 July 2022 amended Article 30bis of the law of 2 August 2002 on the supervision of the financial sector and financial services. This amendment empowered the FSMA to adopt regulations “that subject virtual currencies or specific categories of them, marketed or advertised to retail customers, to restrictive conditions”.

FSMA has subsequently enacted its regulation on this basis.

3. Scheme of the Regulation

The proposed scheme is based on three elements:

(i) Adherence to minimum standards to ensure that advertising information is accurate and not misleading.

Consumer advertising must provide truthful and reliable information.

This fundamental principle requires that adverts cannot contain subjective evaluations unsupported by an independent source, which might directly or indirectly create a positive impression of the product.

Similarly, advertisements cannot exaggerate a positive or seemingly positive feature.

(ii) Compulsory inclusion of particular warnings in advertising.

As virtual currency investments are highly specialised, the FSMA believes that all advertisements promoting virtual currencies to consumers should contain a standardised warning message.

Every advert should display the following statement: “Virtual money, real risks. In crypto only the risk is guaranteed“.

(iii) A requirement to inform the FSMA in advance of mass advertising campaigns.

The FSMA will concentrate its attention primarily on significant market segments, such as advertisements from leading service providers with a considerable customer base, and their representatives.

A distinction is drawn between adverts disseminated as part of a mass campaign and those distributed in a more confined context.

A mass campaign is defined as advertising directed at a minimum of 25,000 customers. Adverts displayed on a publicly accessible infrastructure, such as a stadium, railway station, or metro, or on a publicly accessible website, whether by the website operator or a third party, or those presented on a social network by an individual with at least 25,000 followers, are deemed to be a mass campaign.

The control mechanism put in place for mass campaigns necessitates prior notification to the FSMA. The person responsible for the advert’s content is obliged to notify the FSMA, and this duty does not extend to the media outlet or platform where the advert appears.

4. Entry into force

The regulation enters into force two months after the publication of the Royal Decree of approval in the Moniteur belge. It was published in the Belgian Official Gazette on 17 March 2023 and will enter into force on 17 May 2023.

Advertisements broadcast from the date of entry into force are therefore subject to the provisions of the regulation. Advertisements that began to be broadcast before that date must be brought into conformity with the regulation within three months of the publication of the Royal Decree.

On the topic, you may also be interested to consult: (in French only) MiCA – Markets in Crypto-Assets | Droit bancaire et financier en Belgique.

This post, drafted by Pierre Proesmans was first published on