Last month, on 27 January, marked the end of an era when the provision of virtual asset services was not a regulated activity in Belgium. A law has now been adopted which amends the Belgian anti-money laundering law in order to, inter alia, regulate the provision of such services.
Virtual asset service providers were already subject to some regulation since relatively recently. Indeed, in the context of the implementation of the Fifth AML Directive (Directive (EU) 2018/843), Article 5 of the Belgian anti-money laundering law includes in its list of affected entities: providers of exchange services between virtual currencies and legal currencies as well as providers of custody portfolio services (together, "virtual asset service providers"). Note that only virtual asset service providers established in Belgium are subject to the Belgian anti-money laundering law (this covers not only providers incorporated under Belgian law but also those incorporated in another EEA Member State, provided that the latter have a branch or any other form of permanent establishment in Belgium as defined in CJEU case law (e.g. distributors or representatives)).
In addition to being subject to the Belgian anti-money laundering law, virtual asset service providers established in Belgium must also register with the FSMA. This is one of the new features introduced by this latest amendment to the Belgian anti-money laundering law.
Essentially, the new law provides for the following new features:
granting the following powers to the FSMA:
the registration of providers of exchange services between virtual currencies and legal currencies in a special register and the registration of providers of custody portfolio services in another register. Note that registration is only compulsory for providers incorporated under Belgian law as well as providers incorporated in another EEA Member State, provided that the latter have a branch or any other form of permanent establishment in Belgium as defined in CJEU case law. For the purposes of this law, Automated Teller Machines (“ATM”) established on Belgian territory that allow the exchange of virtual currencies and legal currencies are treated as permanent establishments, so that the registration obligation also applies to them;
the supervision of the above-mentioned establishments in exercising their activities related to virtual assets;
prohibiting persons governed by the law of a third country from offering and providing, on Belgian territory, as a regular professional activity (even if supplementary or ancillary), exchange services between virtual currencies and legal currencies as well as custody portfolio services.
Both the provision of virtual asset services on Belgian territory without registration with the FSMA and the provision of virtual asset services on Belgian territory as a regular professional activity by persons governed by the law of a third country will be subject to criminal sanctions. These criminal sanctions should be without prejudice to the administrative sanctions provided for in Article 86bis of the law of 2 August 2002 on the supervision of the financial sector and financial services.
Furthermore, pursuant to the royal empowerment for the registration of virtual asset service providers provided for in the Belgian anti-money laundering law, a royal decree is expected to be adopted in order to establish (i) the rules and conditions for the registration with the FSMA of virtual asset service providers established in Belgium, (ii) the conditions for the exercise of these activities and (iii) the rules of supervision to which these providers would be subject. As it stands, the draft royal decree makes registration subject to the conditions of expertise, professional integrity, absence of a professional ban and a shareholder composition that ensures sound and prudent management of the company.
In addition to these new national regulatory measures, the European MiCA Regulation is also in the pipeline.
The law amending the Belgian anti-money laundering law has just come into force. As regards the other regulations mentioned above, their date of entry into force is not yet known.
Our regulatory team will be happy to assist you with your registration files and any other questions you may have on this subject.
Benoît Vandervelde - Partner, Brussels
Florence Berchem - Associate, Brussels
Anaïs Casteur - Junior Associate, Brussels
