New rules on advertisements for virtual currencies in Belgium 

The Belgian Financial Services and Markets Authority (FSMA) has issued a new regulation to limit the commercialisation of virtual currencies to consumers in Belgium. The new regulation is set out in the Royal Decree of 5 January 2023, which was published in the Belgian State Gazette on 17 March and will enter into force as of 17 May. 

In recent years, there has been a steep rise in the popularity of investments in bitcoin, ether and various other cryptocurrencies. Advertisements for such cryptocurrencies, which also target Belgian consumers, often use a wide range of distribution channels, including new channels and social networks such as TikTok and Instagram. The losses suffered in late 2021 and early 2022 by consumers that invested in cryptocurrencies led the Belgian regulator to take action to better inform consumers of the risks associated with cryptocurrencies. 

The new regulation is based on three pillars: minimum rules to ensure that the advertisement is correct and not misleading; mandatory warnings to be included in advertisements; and prior notification to the FSMA of mass campaigns. 

What is its scope?

The royal decree applies to (A) advertisements with consumers (B) on a regular professional basis or occasionally and for remuneration, (C) for the commercialisation of virtual currency (D) in Belgium.

A. It applies to any communication aimed at promoting the purchase or subscription of one or more virtual currencies, regardless of the medium used or means of distribution is considered to be an "advertisement". This definition is very broad. For instance, the mere content of a website or any other medium that is publicly accessible could be regarded as an advertisement to consumers.

B. Any person who receives any remuneration or other benefit in exchange for the advertisement falls within the scope of the new rules, irrespectively whether the advertising is made on a regular professional basis or occasionally. This can also capture publicity by trade platforms or posts on social media by influencers. 

C. Virtual currencies means any digital representations of value that are not issued or guaranteed by a central bank, are not attached to a legal currency and do not have a legal status of currency of money, but are accepted as a mean of exchange, namely they can be transferred, stored and traded electronically (similar definition as used in the fifth EU anti-money laundering directive (Directive (EU) 2018/843)). Cryptocurrencies that qualify as investment instruments are excluded from the scope, as are financial instruments (such as derivatives) of which the return depends on cryptocurrencies.

The goal of the advertising needs to be the commercialisation of one or more virtual currencies. An intermediary of virtual currencies that only acts as a named sponsor for an event to increase its brand awareness is in principle not captured under the new rules. However, should that intermediary only offer services for one type of product, there will be deemed to be a link to the sponsoring and that product.

D. The advertisement can be considered to be "in Belgium" when one of the national languages is used (that is, Dutch, French or German), when Belgian media or platforms are involved (including websites with a .BE domain name) or when (images of) well-known persons in Belgium are used. Also references to contact people in Belgium or the lack of a disclaimer stating that the advertisement is not aimed at consumers in Belgium, etc. are elements that will be taken into account to determine if Belgian consumers are targeted. Advertisements that are diffused on a worldwide scale and to which Belgian consumers have access are not falling under the scope if there is no specific link to Belgium. This will always be assessed on a case-by-case basis. 

It remains to be seen how the FSMA will interpret these key concepts in practice. The royal decree of 5 January 2023 contains some useful background information to help anticipate the FSMA's reaction.

New obligations

The new royal decree determines that the advertisement may not be misleading or incorrect, and more specifically it provides that every advertisement:

• must be recognisable as an advertisement;
• must be consist with the warnings (see below);
• may not emphasise the potential advantages of the virtual currency without providing a correct, clear and balanced indication of the risks related to the virtual currency;
• may not emphasise characteristics or make comparisons which are not relevant for a good understanding of the nature and the risks of the virtual currency. For instance, the advertisement may not compare the results of an athlete with the (potential value of) the virtual currency.
• may not contain any declarations about the future value of or return generated by the virtual currency; and
• must be drafted in a non-technical manner which is understandable to the consumer.

Mandatory warnings

The new royal decree furthermore requires that every advertisement should begin with the following warning: "Virtual currencies, real risks. The only guarantee in crypto is risk." Further warnings (or a link thereto) must be included and it is not allowed to make any claims in the advertisement that would conceal or minimise these warnings.

If a person's image appears in the advertisement and he/she receives a fee or other type of compensation, the advertisement should clearly mention this.

Prior notification of 'mass campaign adverts'

Any advertisement that is considered to be a "mass campaign advertisement" must be notified to the FSMA at least 10 days prior to the start of the campaign. This will be the case if the advertisement is visible from a public road or at a location that accessible to the public, via a website accessible to the public or on a social network (such as Instagram or TikTok) by a person who has at least 25,000 followers on social network at the moment of the communication or who pays the social network for the promotion of the communication.

There is no formal approval from the FSMA required to proceed with the (mass campaign) advertisement. However, if the FSMA deems that the (mass campaign) advertisement is not in line with its requirements, it will inform the advertiser and request a modification or publish/tweet a warning. Non-compliance with the requirements can be sanctioned by the FSMA by way of penalty payments or via administrative sanctions. 

If you need more information about the new advertising rules for virtual currencies, please do not hesitate to contact one of our experts mentioned below or your usual contact at Osborne Clarke.