Implementing MiCA in Belgium: Understanding the supervisory system to be put in place for crypto-asset activities

Under MiCA, the public offering and the admission to trading of crypto-assets in the EU are subject to different requirements depending on the categorisation of the crypto-assets. So the proposed allocation of the supervision of these rules depends on the type of crypto-asset. 

Crypto-assets (other than ARTs or EMTs)

The Crypto Bill designates the FSMA as the sole competent authority to supervise the application of MiCA’s provisions related to the public offer and the admission to trading of crypto-assets (that are not asset-referenced tokens (ARTs) or e-money tokens (EMTs)).

This means that the FSMA would be the authority to which offerors, persons seeking admission to trading or operators of trading platforms for crypto-assets have to notify their crypto-asset white paper and, if required by the FSMA, their marketing communications.

The FSMA shall not require prior approval of crypto-asset white papers, nor of any related marketing communications, before their respective publication. Finally, if the offeror of crypto-assets is an institution supervised by the National Bank of Belgium (NBB) or the European Central Bank (ECB), the FSMA would have to inform that authority of the notification of the whitepaper.

Asset-Referenced Tokens (ARTs)

For ARTs, the Crypto Bill formally designates the NBB as the responsible authority. But the Belgian legislator envisages in practice a dual supervision model depending on the nature of the regulatory requirements:

• The prudential requirements and the public offering rules under MiCA would be supervised by the NBB.
• The provisions of MiCA imposing rules of conduct or relating to the publication of the white paper and marketing communications would be supervised by the FSMA.

Under this envisaged division of powers, the NBB would notably be responsible for ensuring that ART issuers comply with MiCA's requirements in terms of governance, own funds and reserve of assets. The FSMA would be responsible for monitoring compliance with marketing communication requirements and issuers' compliance with provisions relating to rules of conduct, the publication of white papers, complaint handling procedures and conflicts of interest. The NBB would only make a decision after having received advice from the FSMA.

E-Money Tokens (EMTs)

MiCA specifies that EMTs are deemed to be e-money. This means that the prudential requirements² and the rules of conduct under Directive 2009/110/EC on electronic money institutions (EMD II) that apply to issuers of electronic money also apply to issuers of EMTs, with some exceptions. Under the Crypto Bill, the tasks and prerogatives entrusted to the NBB on the basis of the transposition of EMD II would also apply for an EMT issuance.³

A limited role is also reserved for the Federal Public Service of Economy (FPS Economy): they stand to become responsible for enforcing the prohibition on interest on EMTs and for certain rules regarding issuance and redemption of EMTs.

With regard to the supervision of crypto-asset service providers, two types of entities must be distinguished:

• regulated financial institutions, which are only required to submit a notification to provide crypto-asset services; and
• CASPs, which must apply for authorisation to do so.

Regulated financial institutions

The Crypto Bill envisages a dual supervision framework, depending on the entity’s regulated status and the nature of the requirement concerned.

Prudential requirements

For entities for whom the NBB is the prudential supervisor, the NBB is responsible for MiCA's prudential requirements (such as governance and organisational rules). As such, the NBB would supervise credit institutions, stockbroking firms, central security depositories and electronic money institutions.

For entities for whom the FSMA is the prudential supervisor, the FSMA would remain responsible for these requirements. As such, the FSMA would supervise portfolio management and investment advice companies, UCITS management companies, AIFMs and market operators.

Conduct rules

For all CASP-types, (including those falling within the prudential jurisdiction of the NBB), the FSMA would be responsible for complying with the rules of conduct under MiCA, which include the general obligation to act in the best interests of clients and service-specific obligations applicable depending on the crypto-asset services provided.

Other CASPs

For CASPs that are not otherwise licensed under sectoral legislation, the FSMA is responsible for compliance with both prudential requirements and rules of conduct.

For financial institutions, the provisions of MiCA apply without prejudice to the requirements to which they are already subject due to their prudential status.

For example, with regard to credit institutions, MiCA's requirements apply without prejudice to the requirements set out in the Act of 25 April 2014 on the status and supervision of credit institutions (the Banking Act). So a credit institution governed by Belgian law that wants to issue ARTs would need to notify any changes to its program of activities if the issuance constitutes a change to that program. It would also have to adapt its organisation to take account of the issuing activity, where applicable.

Similarly, a Belgian credit institution looking to provide crypto-asset services would have to, in addition to fulfilling the notification requirements in MiCA, also notify any changes to its program of activities if this new activity constitutes a change to that program. And it would have to adapt its organisation to take account of the issuing activity, where applicable.

Where the obligations applicable to CASPs under MiCA coincide with or overlap with those of sectoral legislation otherwise applicable to them, the Belgian legislator suggests that CASPs should comply with the more specific or stricter requirements, to ensure compliance with both sets of rules.

The FSMA is exclusively competent for applying and enforcing MiCA's provisions on preventing and combating crypto-asset market abuses (insider trading, unlawful disclosure of privileged information and market manipulation related to crypto-assets).

To carry out their supervisory tasks effectively, the Crypto Bill clarifies the supervisory powers made available to the competent authorities and also specifies which measures they are empowered to adopt based on their existing powers.

With regard to the public offering and admission to trading of crypto-assets, the FSMA could make use of the powers conferred to competent authorities under MiCA to:

• compel amendments to crypto-asset whitepapers or marketing communications; and
• suspend an offer to the public or an admission to trading of crypto-assets in case of breach with MiCA's requirements.

The Belgian regulator will also have the power to use existing supervisory powers to issue requests for information or to summon and hear any person in relation to crypto-activities. 

The NBB and the FSMA also have a wide range of remedial measures and sanctioning powers for ART and EMT issuers and CASPs, which would allow them to:

• impose stricter capital, liquidity, or risk concentration requirements;
• appoint a special commissioner with prior written approval powers; and
• order replacement of board members or appointment of provisional managers.

They may also impose:

• administrative fines of up to 12.5% of annual turnover for ART/EMT issuers and up to 5% of annual turnover for CASPs;
• deadlines to stop breaches for which non-compliance could trigger penalty payments of up to EUR2.5 million per breach or EUR50,000 per day (max 3% of annual turnover).

For serious breaches, the regulators can also suspend or revoke licenses, or impose temporary management bans, including prohibitions on personal trading or executive functions.

The Crypto Bill also makes consequential changes to Belgian sectoral legislation to integrate the various crypto-activities that they can undertake. For example, for credit institutions, the Crypto Bill modifies the Banking Act to include stablecoin issuance activities (ART and EMT) and the provision of crypto-asset services within the list of activities benefiting from the European passport regime under the Banking Act.

The Crypto Bill also amends the law of 11 July 2018 on public offerings of investment instruments. The amendments specify that this law does not apply to crypto-assets governed by MiCA. This law, which includes a catch-all clause according to which it applies to all other instruments that enable financial investments, regardless of the underlying assets, could potentially capture certain forms of crypto-assets under MiCA. In this context, the Crypto Bill aims to clarify that investment instruments that also constitute crypto-assets are not subject to the provisions of the law of 11 July 2018.

Finally, the Crypto Bill also introduces several changes to the Belgian Act of 18 September on the prevention of money laundering and terrorist financing (the AML Act), implementing Regulation (EU) 2023/1113 on information accompanying transfers of funds and certain crypto-assets⁴ (the TFR).

First, the Crypto Bill extends the personal scope of application of the AML Act to include CASPs. It also removes the registration requirements for virtual asset service providers (VASPs) included in the AML Act, which would be replaced by the registration requirements for CASPs under MiCA.

Secondly, the Crypto Bill also extends the obligation to designate a central contact point, under conditions to be defined by the FSMA in a regulation, to CASPs governed by the law of another member state and established in Belgium in a form other than a branch. This central contact point would facilitate the FSMA's supervisory tasks by providing it, at its request, with all documents and information.

Finally, the Crypto Bill requires CASPs to implement enhanced due diligence measures in certain cases. This is the case, for example, where a CASP, acting as a correspondent, provides crypto-asset services (including crypto-asset transfers) to a client entity established in a third country, or where CASPs perform crypto-asset transfers to or from a self-hosted address.

The Crypto Bill remains at the proposal stage so must complete the legislative process, including discussions in the Finance Committee, before it can be enacted.

If adopted, the Crypto Bill would mark a significant step in integrating European crypto-related regulation into national law. For financial and non-financial institutions, the long-awaited designation of competent supervisory authorities will bring much-needed legal certainty and accelerate the development of such activities in Belgium.

The envisaged allocation of responsibilities between the NBB, FSMA, and FPS Economy, while providing clarity, remains complex and must be carefully analyzed by entities to determine which authority to approach for specific obligations. As such, we recommend that clients contemplating launching crypto-activities be well advised on how best to approach the regulators in Belgium.

Our Fintech and Financial Services team is constantly monitoring the evolution of the Belgian and European regulation around crypto-assets and is happy to assist you with any query you might have.