Belgium imposes registration for crypto businesses under EU rules
Cryptocurrency companies operating in Belgium have to apply for a license to the nation’s financial watchdog as the new anti-money laundering (AML) regulations come into effect.
License applicants must show to Belgium’s Financial Services and Markets Authority (FSMA) that they possess sufficient capability, coherence, and solvency to run the business.
As part of their plans, the FSMA will impose a minimum capital of €50,000 ($53,000) and mandate a corporate structure on cryptoasset-related businesses to register with the country’s regulator.
The legal notice further reads that the following services are subject to the requirement to register: “Any virtual assets service provider (VASP) that wants to provide exchange services between virtual currencies and legal currencies, or custody wallet services. Providers already operating on 1 May 2022 must notify the FSMA of the exercise of their activity before 1 July 2022 and apply for registration before 1 September 2022.”
Once the new regulation takes effect, that would force crypto exchanges, wallet providers and crypto custodial service providers operating in Belgium to register with a financial regulator and prove that they are meeting AML requirements if they want to continue their operations.
AMLD5 brings crypto businesses within the scope of AML rules
The rules come within the implementation of the Fifth Money Laundering Directive (AMD 5), which provides a broad definition of crypto assets and qualifying it as “financial instruments.” Such a broad definition of financial instruments goes beyond cryptocurrencies to cover many related-assets, including security tokens.
Under AMLD5, crypto exchanges and custodian wallet providers were brought within the scope of EU anti-money laundering rules for the first time. The law imposes registration and customer due to diligence requirements that force operators to disclose their traders’ identities and report suspicious activity.
The AMLD5 rules, which went into effect in January 2020, is a pan-European anti-money laundering directive that requires member states to implement it into their national laws. The legislation is notable because it represents the EU’s first attempt to regulate cryptocurrency activities at EU-level expressly.
Extending AML regulations to cryptocurrency activities is already adopted in several countries around the world, such as Australia and the UK, and tracks the EU’s recent push to regulate the sector.
In addition, European regulators have united in pursuing a tough regulatory approach should crypto businesses seek authorization to operate in the 19-country bloc. They spoke about serious implications for financial stability if authorities lost control over the phenomenon and called for a common set of rules for crypto assets, but none of them has properly taken off so far.
Belgium’s financial watchdog was keen to police the rampant internet-based cryptocurrency schemes which operate into a zone that the watchdog regulates.
FSMA operates as a watchdog for financial trading, securities, and markets in Belgium, overseeing a variety of assets and compliance issues for traders and consumers. Today’s warning is the latest initiative in its efforts to clamp down on companies engaging in fraudulent activities.
