Belgium Tightens Screws on Crypto-Related Financial Crime

The Belgian parliament has recently passed a new law aimed at regulating certain crypto-service providers in line with European Union (EU) directives. This article will provide an overview of the changes made to the Anti-Money Laundering Act, which entered into force on February 21.

Targeted Crypto-Service Providers

The new law targets two types of providers:

• Exchange services between virtual currencies and fiat currencies: These are services that allow users to exchange one type of currency for another.
• Custodian wallet providers: These are services that hold or manage digital assets on behalf of their clients.

Key Changes

Here are some key changes introduced by the new law:

Definitions

The law defines what constitutes “exchange services between virtual currencies and fiat currencies” and renders providers of these services subject to the Belgian AML Act if they have electronic infrastructures installed in Belgium through which they offer their services.

Prohibition on Non-EU Individuals

Non-EU individuals are prohibited from offering or providing crypto-related services in Belgium, even on a complimentary basis.

Registration with FSMA

The Financial Services and Markets Authority (FSMA) will maintain a registry of providers of exchange services and custodian wallet services. Providers established in Belgium must register with the FSMA to avoid facing penalties.

New Criminal Offenses and Sanctions

Several new criminal offenses and sanctions have been introduced under the law, including penalties for non-EEA individuals offering or providing crypto-related services in Belgium without authorization.

Implementation

The implementing Royal Decree was adopted on February 8 and will come into effect on May 1. It specifies the providers of exchange services and custodian wallet providers subject to registration with the FSMA, outlining their registration requirements and operating conditions.

A Significant Shift Towards Regulation

In anticipation of upcoming changes at the EU level, including the proposed Markets in Crypto-Assets (MiCA) regulation and strengthened anti-money laundering rules, Belgium’s move marks a significant shift towards regulating the crypto-sphere.