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In brief

On 23 February 2022, the Belgian Royal Decree of 8 February 2022 on the status and supervision of service providers for the exchange of virtual currency and fiat currency and custodian wallet providers (“Virtual Currency Royal Decree“) was published in the Belgian State Gazette. The Virtual Currency Royal Decree introduces registration requirements and operating conditions for virtual currency service providers into Belgian law. The Virtual Currency Royal Decree will enter into force on 1 May 2022, with a grandfathering regime for existing service providers. 


Key takeaways

The Virtual Currency Royal Decree introduces a new regulatory regime for (i) providers of virtual currency and fiat currency exchange services (also referred to as crypto exchange service providers) and (ii) custodian wallet providers. The key takeaways are as follows:

  1. Mandatory registration with the FSMA: As of 1 May 2022, persons established in Belgium whose regular professional activity consists of providing crypto exchange services and offering custodian wallets on Belgian territory will be required to register with the Belgian Financial Services and Markets Authority (FSMA).
  2. Strict territorial scope of application: The registration requirement only applies to virtual currency service providers with a physical presence or permanent establishment in Belgium. Automated teller machines (ATMs) located on Belgian territory allowing for the exchange between virtual currency and fiat currency will be considered an establishment in Belgium and will trigger the requirement to register with the FSMA.
  3. Ban on third-country service providers: It is prohibited for natural or legal persons governed by the law of a third country (non-EEA) to provide or offer on Belgian territory, as an ordinary professional activity or even as an additional or complementary activity, services for the exchange between virtual currencies and fiat currencies, or to offer custodian wallet services. EEA virtual currency providers can, on the other hand, freely provide their services in Belgium on a cross-border basis without being required to register with the FSMA (provided that they do not have a physical presence in Belgium).
  4. New registration conditions: To obtain registration with the FSMA, virtual currency service providers must comply with various registration conditions, such as the requirement to possess professional reliability and appropriate expertise. In addition, minimum capital and anti-money laundering (AML) requirements apply. Shareholders must also be fit to ensure sound and prudent management of the company.
  5. “Light” registration regime for regulated entities: The obligation to register with the FSMA also applies to regulated financial institutions (e.g., credit institutions, payment institutions, investment firms, etc.) that provide or offer, in addition to their core services, crypto exchange services and/or custodian wallet services. However, they will be exempt from those registration conditions that already apply to them as a result of their other regulated status.
  6. Grandfathering regime: Existing virtual currency service providers may continue to exercise their activity on a temporary basis after 1 May 2022 under certain conditions.

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Author

Michael Van Acker is a partner in the Brussels office. He has a broad background in international finance, with a particular focus on syndicated loans, acquisition finance, real estate finance and project finance. He is also seasoned in advising on financial restructurings. Michael has represented a wide range of lenders, sponsors and borrowers on domestic and cross-border transactions involving major projects, leveraged buy-outs and property redevelopments, among others.

Author

Steffi Illegems is a senior associate in the Financial Services & Insurance Practice Group in the Antwerp office. She joined Baker McKenzie in 2019. Prior to joining the firm, she was a PhD researcher on insurance supervision at the University of Antwerp. She was also a trainee at the European Insurance and Occupational Pensions Authority and a visiting scholar at the University of Connecticut.

Author

Olivier Van den broeke is a senior associate in the Financial Services Regulatory & Insurance Practice Group in the Antwerp office. He joined Baker McKenzie in 2013.

Author

Petra Lasku is an Associate in Baker McKenzie Brussels office.

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