BELGIUM SAYS BTC, ETH AND OTHER DECENTRALIZED COINS ARE NOT SECURITIES

Last updated: June 19, 2025, 20:13 | Written by: Brock Pierce

The regulatory landscape surrounding cryptocurrencies is constantly evolving, creating both opportunities and uncertainties for investors and businesses alike.One key point of contention globally is whether digital assets like Bitcoin (BTC) and Ethereum (ETH) should be classified as securities. Belgium s financial regulatory body has confirmed its position that Bitcoin (BTC), Ether (ETH) and other cryptocurrencies that are issued solely by computer code do not constitute securities.The explanation came from Belgium's Financial Services and Markets Authority (FSMA) in a Nov. 22 report, a draft of which was opened for comment in Jul. 2025. The clarification comes following anA recent announcement from Belgium's Financial Services and Markets Authority (FSMA) has brought some clarity to this debate, at least within the Belgian context.The FSMA has officially confirmed that BTC, ETH, and other cryptocurrencies issued solely by computer code do *not* constitute securities under Belgian law.This position contrasts sharply with the views of the U.S. Belgium s top financial regulatory has confirmed to Belgian-based digital asset issuers and service providers that BTC and ETH do not constitute securities. Belgium says BTC, ETH and otherSecurities and Exchange Commission (SEC) Chairman Gary Gensler, particularly regarding Ethereum, creating a divergence in regulatory approaches that could have significant implications for the future of the crypto industry.This article will delve into the FSMA's reasoning, explore the contrasting views with the SEC, and analyze the potential impact of this decision on the broader cryptocurrency market.

Understanding the FSMA's Position on Crypto Assets

Belgium's financial regulatory body, the FSMA, has provided a clear stance on the classification of certain cryptocurrencies. Belgium s financial regulatory body has confirmed its position that Bitcoin (BTC), Ether (ETH) and other cryptocurrencies that are issued solely by computer code do not constitute securities. The explanation came from Belgium s Financial Services and Markets Authority (FSMA) in a Nov. 22 report, a draft of which was opened for comment inTheir core argument rests on the principle that if a crypto asset is issued solely by computer code and lacks a central issuer, it cannot be considered a security. Bitcoin and Ethereum cannot be considered securities, Belgium's FSMA has stated. The regulator of the European country stated that if there is no issuer, the crypto asset cannot be considered a security. However, if the instruments have a payment or exchange function, additional rules can beThis distinction is crucial because securities are typically subject to stricter regulations and compliance requirements compared to other asset classes.

Key Factors Considered by the FSMA

Several factors contributed to the FSMA's decision:

Absence of an Issuer: The fundamental criterion is the lack of a identifiable central entity responsible for the issuance and management of the cryptocurrency. Belgium's take on what conditions must be met in order for a crypto asset to be classed as a security are in contrast to the views of U.S. Securities Exchange Commission Chairman Gary Gensler. Belgium says BTC, ETH and other decentralized coins are not securitiesBitcoin and Ethereum, in their original decentralized forms, fall under this category.
Decentralized Nature: The FSMA emphasizes the decentralized structure of these cryptocurrencies, where no single party controls the network or its operations.
Issuance via Computer Code: The fact that these digital assets are created through algorithmic processes, rather than by a traditional issuer, further supports their classification as non-securities.

This approach aligns with a more pragmatic view of cryptocurrencies as technological innovations rather than purely financial instruments. 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.By focusing on the underlying mechanics of issuance and control, the FSMA aims to provide a regulatory framework that fosters innovation while addressing potential risks.

The Contrast with the SEC's Approach in the United States

The FSMA's stance on Bitcoin and Ethereum contrasts sharply with the approach taken by the U.S. Belgium s financial regulatory body has confirmed its position that Bitcoin (BTC), Ether (ETH) and other cryptocurrencies that are issued solely by computer code do not constitute securities.The explanation came from Belgium s Financial Services and Markets Authority (FSMA) in a Nov. 22 report, a dSEC, especially concerning Ethereum.While SEC Chairman Gary Gensler has acknowledged that Bitcoin is a commodity, he has repeatedly suggested that Ethereum could be classified as a security, particularly after its transition to a proof-of-stake (PoS) consensus mechanism.

The Proof-of-Stake Debate and Security Classification

The core of the SEC's concern lies in the potential for **staking** to be considered an investment contract, a key element in determining whether an asset is a security under the **Howey Test**.The Howey Test, derived from a 1946 Supreme Court case, defines an investment contract as a contract, scheme, or transaction where a person invests money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party.

Gensler's argument suggests that staking rewards could be viewed as profits derived from the efforts of others (validators), thus potentially satisfying the Howey Test criteria.This perspective has raised concerns within the crypto community, as it could subject staked ETH and other PoS cryptocurrencies to stricter securities regulations.

The FSMA's decision to not classify ETH as a security, even after its shift to proof-of-stake, underscores the divergence in regulatory philosophies between the two jurisdictions.This discrepancy highlights the ongoing debate about how to appropriately regulate cryptocurrencies, balancing investor protection with fostering technological innovation.The **regulatory uncertainty** surrounding crypto assets in the United States remains a significant hurdle for industry growth.

Implications of Belgium's Decision for the Crypto Market

Belgium's decision to classify Bitcoin and Ethereum as non-securities has several potential implications for the cryptocurrency market, both within Belgium and beyond.

Positive Impacts

Clarity for Businesses: The FSMA's clear statement provides much-needed clarity for Belgian-based digital asset issuers and service providers.This clarity allows these businesses to operate with greater certainty, fostering innovation and investment in the crypto space.
Attracting Investment: A more favorable regulatory environment could attract cryptocurrency-related businesses and investments to Belgium, boosting its economy and positioning it as a hub for digital asset innovation.
Setting a Precedent: Belgium's decision could influence other European countries to adopt similar approaches, potentially leading to a more harmonized regulatory landscape for cryptocurrencies within the European Union.

Potential Challenges

Regulatory Arbitrage: The differing regulatory approaches between countries could lead to regulatory arbitrage, where businesses seek to operate in jurisdictions with more favorable regulations, potentially creating challenges for cross-border enforcement.
Investor Protection Concerns: Some argue that classifying cryptocurrencies as non-securities could weaken investor protection, as these assets would be subject to less stringent regulations.
Global Fragmentation: The lack of a globally consistent regulatory framework for cryptocurrencies could lead to fragmentation, hindering the development of a truly global and interoperable crypto ecosystem.

The Broader European Context and MiCA

While Belgium's stance is significant, it's essential to consider the broader European context.The European Union is currently implementing the **Markets in Crypto-Assets (MiCA)** regulation, which aims to establish a comprehensive legal framework for crypto assets across all EU member states.

MiCA will introduce licensing requirements for crypto-asset service providers (CASPs), rules for stablecoins, and measures to prevent market abuse.Once fully implemented, MiCA will likely supersede some national regulations, including aspects of Belgium's current approach.However, the FSMA's decision to clarify the status of Bitcoin and Ethereum ahead of MiCA's full implementation demonstrates its proactive approach to regulating the crypto space.The long term impacts of MiCA are still to be seen, but it is expected to have a dramatic impact on crypto activity across the EU.

How to Navigate the Evolving Regulatory Landscape

Given the constantly evolving regulatory landscape surrounding cryptocurrencies, it's crucial for investors and businesses to stay informed and adapt their strategies accordingly.

For Investors

Do Your Research: Before investing in any cryptocurrency, thoroughly research the asset, its underlying technology, and the regulatory environment in your jurisdiction.
Understand the Risks: Be aware of the risks associated with cryptocurrency investments, including price volatility, security vulnerabilities, and regulatory uncertainties.
Diversify Your Portfolio: Don't put all your eggs in one basket.Diversify your cryptocurrency investments to mitigate risk.
Stay Informed: Keep up-to-date with the latest regulatory developments and industry news.

For Businesses

Seek Legal Counsel: Consult with legal professionals who specialize in cryptocurrency regulations to ensure compliance with all applicable laws and regulations in each jurisdiction where you operate.
Implement Robust Compliance Programs: Develop and implement robust compliance programs that address anti-money laundering (AML), know-your-customer (KYC), and other regulatory requirements.
Monitor Regulatory Changes: Continuously monitor regulatory changes and adapt your business practices accordingly.
Engage with Regulators: Engage with regulators to understand their perspectives and contribute to the development of sensible regulatory frameworks.

Practical Examples and Scenarios

To further illustrate the implications of Belgium's decision, consider the following examples:

A Belgian startup developing a decentralized finance (DeFi) platform: The FSMA's clarification provides the startup with greater legal certainty, allowing it to operate with confidence without the burden of complying with securities regulations.This could attract more investment and accelerate the platform's development.
A U.S.-based crypto exchange considering expanding its operations to Europe: The exchange would need to carefully assess the regulatory landscape in each country, taking into account Belgium's stance on Bitcoin and Ethereum, as well as the upcoming MiCA regulation.This would inform its decision on where to establish its European headquarters.
An individual investor in Belgium considering investing in staked ETH: The FSMA's decision provides some reassurance that staked ETH is not considered a security in Belgium, reducing the regulatory risk associated with the investment.However, the investor should still be aware of other risks, such as price volatility and smart contract vulnerabilities.

Common Questions and Answers

Here are some frequently asked questions about the FSMA's decision and its implications:

Q: Does the FSMA's decision mean that all cryptocurrencies are not securities in Belgium?
A: No, the FSMA's decision only applies to cryptocurrencies that are issued solely by computer code and lack a central issuer.Other crypto assets, such as those issued by companies as part of an initial coin offering (ICO), may still be considered securities.
Q: Will the FSMA's decision change after MiCA is fully implemented?
A: It's possible.MiCA will establish a comprehensive regulatory framework for crypto assets across the EU, and some aspects of the FSMA's current approach may need to be adjusted to align with MiCA's requirements.
Q: What are the potential risks of investing in cryptocurrencies that are not considered securities?
A: Cryptocurrencies that are not considered securities may be subject to less stringent regulations, which could increase the risk of fraud, market manipulation, and other illicit activities.

The Future of Crypto Regulation: A Call for Harmonization

The divergence in regulatory approaches between Belgium and the United States highlights the need for greater harmonization in the global regulation of cryptocurrencies.A consistent and well-defined regulatory framework is essential to foster innovation, protect investors, and prevent illicit activities.International cooperation and dialogue are crucial to achieving this goal.Ideally, a balance is struck between encouraging innovation and protecting consumers.

The industry itself must also step up to the plate to self regulate, building trust and credibility in the market.This includes adhering to best practices for security, transparency, and risk management.Ultimately, the long-term success of the cryptocurrency industry depends on its ability to build a sustainable and responsible ecosystem.

Conclusion: Key Takeaways

Belgium's decision to classify Bitcoin, Ethereum, and other decentralized cryptocurrencies as non-securities represents a significant development in the regulatory landscape.This decision provides clarity for businesses, could attract investment, and potentially influence other European countries.However, it also highlights the divergence in regulatory approaches between jurisdictions, raising concerns about regulatory arbitrage and investor protection.As the cryptocurrency industry continues to evolve, greater harmonization and international cooperation are needed to create a consistent and well-defined regulatory framework that fosters innovation, protects investors, and prevents illicit activities.Keeping abreast of changes is vital for both businesses and investors.

Key takeaways:

The FSMA in Belgium states that **Bitcoin and Ethereum are not securities** due to their decentralized nature.
This contrasts with the SEC's view, particularly regarding Ethereum and its proof-of-stake mechanism.
Belgium's decision provides clarity for businesses and may attract investment.
Greater harmonization is needed in the global regulation of cryptocurrencies.
Investors and businesses must stay informed and adapt to the evolving regulatory landscape.

The regulatory landscape surrounding digital assets is complex and dynamic.Stay informed, do your research, and seek professional advice when needed.Only then can you navigate this exciting but challenging space with confidence.Now is the time to act responsibly, ensuring safety while still realizing gains.