Belgium’s financial regulator has been ordered by the government to regulate cryptocurrency advertising; under new rules that will take effect in May, advertisers will have to clearly warn investors of the risks associated with digital assets They will be required to.
Belgium poised to protect consumers from misleading crypto ads
Belgium’s Financial Services and Markets Authority (FSMA) has been granted the authority to strictly regulate crypto-themed advertising; the new rules, which will take effect within two months, are intended to make the risks associated with virtual currencies “sufficiently prominent” in such advertising, the regulator said in Monday’s announcement.
The respective regulations, issued by the FSMA, which oversees compliance, were published in the Belgian Official Gazette on March 17 and will take effect on May 17, 2023. The regulations stipulate that crypto-related advertisements must be accurate and not misleading, while pointing out the risks.
It also requires prior notice to the FSMA for mass media campaigns (those that transmit advertising to at least 25,000 consumers). This advance notice allows the regulatory agency to intervene prior to the start of such a campaign if it deems it necessary.
“Advertisements should not emphasize potential benefits without accurately indicating the risks, limitations, and conditions. In addition, the advertisement must not contain any statements regarding future value or returns and must be written in understandable language,” the Authority elaborates.
One rule that supplements these requirements is that cryptocurrency advertisements must include a “short, punchy warning” such as the following.” Virtual currency, real risk. The only guarantee of cryptocurrency is risk.” In addition, a more extensive warning that presents the various risks in detail must be posted, referenced, and linked.
The FSMA also intends to be proactive regarding financial education about digital assets. It is currently producing a series of videos on virtual currencies aimed at young people. These are part of an educational package that also includes an information sheet for teachers and a quiz for students.
The financial regulator’s regulatory move follows last week’s call by former Belgian Finance Minister Johan Van Overtveldt for the government to ban cryptocurrencies amid a banking crisis involving two cryptocurrency-friendly banks. It also follows the publication of an article in which the head of the Dutch financial regulator declared that he would deal strictly with crypto businesses under the EU’s Markets in Crypto Assets (MiCA) law.
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