Belgian FSMA checks crypto investors before ad regulation

When new legislation goes into effect on May 17, the Belgian Financial Services and Markets Authority (FSMA) will have additional powers to monitor advertising for virtual currencies. In preparation for its expanded responsibilities, the agency commissioned an investor poll.

The new rule will include three components. Secondly, it will need precision and clarity in language, with no references to future value returns. Second, a caution will be required in every advertisement:

“Virtual currencies, real risks. The only guarantee in crypto is risk.”

In addition, a “broader warning should include a more comprehensive summary of the numerous dangers.”

Lastly, mass campaigns must be filed with the FSMA at least ten days in advance “to allow the FSMA to intervene, if required, before the campaign starts.”

Via its Wikifin financial education hub, the FSMA will also bolster instructional initiatives. To prepare for its new function, the FSMA commissioned a study of 1,000 Belgian investors who deposited funds in investment products other than savings, term deposits, and pension accounts in November 2022.

About a third (34%) of investors between the ages of 16 and 29 purchased virtual currencies, while just 11% of investors between the ages of 50 and 59 did so. Males account for 80% of purchasers. 63 percent of investors resided in Flanders, compared to 22 percent in Wallonia and 15 percent in Brussels.

31% of investors had less than 500 euros’ worth of cryptocurrency, while 15% held more than 10,000 euros’ worth. Traditional investors relied less on the counsel of friends, family, apps, and “robo-advice” than crypto investors.

In May 2022, the FSMA started regulating cryptocurrency exchanges. Now, the United Kingdom has also enforced stricter regulations on crypto advertising.