Legal Crypto In Belgium

An Overview of Cryptocurrency Regulation in Belgium

Legal Status of Bitcoin and Other Cryptocurrencies

In Belgium, digital assets like Bitcoin and Ethereum are considered crypto-assets under the European Union’s Markets in Crypto-Assets (MiCA) Regulation, which offers a full regulatory framework for crypto-assets in all member states of the EU. These digital currencies are not actually banned, but they are not accepted as legal tender (i.e., they cannot be used as a certification for the payment of goods and services by the government). The Belgian government has emphasized that cryptocurrencies like Bitcoin and Ethereum are not classified as securities, exempting them from specific securities regulations.

Regulatory Environment

The cryptocurrency sector in Belgium is considered somewhat unregulated as there is not yet a national framework covering all cryptocurrencies. Instead, it focuses on particular areas, such as AML compliance, consumer protection, and taxation. These rules are a mixture of national regulations and legislation from the EU, ensuring that they broadly dovetail with what is happening elsewhere in Europe while also responding to local concerns.

Anti-Money Laundering and Counter-Terrorism Financing

Belgium has transposed the EU’s Fifth Anti-Money Laundering Directive (5AMLD) into its national law, including digital currencies. Only companies offering crypto services, including exchanges and wallet providers, must register with the Financial Services and Markets Authority (FSMA) and comply with anti-money laundering (AML) and counter-terrorist financing (CTF) requirements. These responsibilities involve verifying the identity of customers, identifying transaction trails, and submitting reports of suspicious behavior. Belgium has adopted Financial Action Task Force recommendations which give clearer meaning to virtual currencies and includes compliance through the wording adopted.

FSMA Supervision and EU MiCA Regulation

The law, enacted in July 2022, broadened the FSMA’s jurisdiction to cover the commercialization of virtual currencies, allowing the regulator to supervise the marketing and distribution of such products, with a focus on consumer protection and market integrity. At the EU level, the MiCA Regulation applies in Belgium and provides for a harmonized framework for crypto-assets, in relation to issuers, crypto-assets service providers, and combating market abuse. It requires service providers to be authorized, centrally administered in the EU, and to respect transparency and consumer protection rules, with full implementation expected by the end of 2024 or 2025.

Taxation of Cryptocurrencies

Cryptocurrencies are considered to be taxable assets by the Belgian tax authority, and certain rules are therefore applicable depending on the type of activity. Revenue from the disposal of cryptocurrency trading/investment is taxed as miscellaneous income, at a rate of 33% for private individuals if the activity is considered speculative. With professional traders who trade for business purposes, their income is not capital gains, but rather business income, which is taxed on a progressive basis. Capital gains on long-term hold by private individuals of cryptocurrencies can be tax-free if they qualify as normal asset management. Nonetheless, it is still not clear how to account for cryptocurrencies because they are not accounted for as an accepted instrument of payment, making corporate financial reporting difficult.

Market Integrity Measures

Belgian law deals with the integrity of the market and market abuse in the crypto-markets, in line with EU law. Insider trading, market manipulation, and similar abusive activities are not permitted, and adequate policing of trading is available. These attempts in the direction of trust and stability are a work in progress in the world of cryptocurrency.

Useful Resources and Contacts

• FSMA Website: Guidance on AML/CTF compliance and crypto regulations.
• MiCA Regulation: EU framework details via EUR-Lex.
• Belgian Tax Authority: Information on crypto taxation.
• Bitstamp, Kraken, Coinbase: Major crypto exchanges accessible in Belgium.

Belgian Crypto Exchanges

As a member of the EU’s open financial market, Belgium enjoys a range of cryptocurrency exchanges. There are a number of popular sources, like Bitstamp, which is headquartered in Luxembourg and is popular because of how close it is and the fact that it complies with EU regulations, and supports Bitcoin, Ethereum, and stablecoins. Kraken, a U.S.-based exchange with a strong European presence, is a solid option for trading cryptocurrencies as fiat currency. Coinbase is popular due to its easy-to-use interface and most EU countries regulate it. Binance has never been blocked to Belgian users, who can still trade many of the digital assets on the network as long as the local anti-money laundering rules are met, despite the company facing regulatory backlash in several EU member states.

Local Exchange and Complementary Currencies

Domestically, Belgium’s own Bit4You exchange was one of the first to sign up with the FSMA, but it has a small user base, and users have flocked to international platforms instead. Ways to get exposure to Bitcoin include centralized exchanges where you can trade your euros for Bitcoin, peer-to-peer platforms like LocalBitcoins and Paxful where buyers and sellers interact directly (bank transfers and cash are the most popular methods of payment), bitcoin ATMs located in cities such as Brussels and Antwerp where you can purchase Bitcoin with cash or a bank or debit card, and over-the-counter trading desks offered by the likes of Kraken or Coinbase for high-net-worth individuals and institutions doing sizeable trades. All crypto operations in Belgium must register with the FSMA and respect anti-money laundering regulations.

Markets of Decentralized Finance (DeFi)

The DeFi market in Belgium is evolving and is not yet regulated on the same level as other financial market activities, with no specific Belgian laws that are directly applicable to DeFi protocols or to activities, such as yield farming, liquidity provision, or decentralized lending. DeFi transactions with security tokens or financial instruments are subject to existing securities regulations and therefore, in addition to compliance with MiCA or other EU regulations, these transactions should be fully compliant under relevant national securities regulations. The European Central Bank has long raised the alarm on the financial stability risks of unbacked crypto-assets, such as DeFi, and is expected to pave the way for EU-wide regulation, with Belgium evidently keen to do the same. Belgian users have access to DeFi platforms from around the world, such as Uniswap, Aave, and Compound, however, local DeFi projects are limited in the absence of a particular DeFi regulation and a small domestic market.

Non-Fungible Tokens (NFTs) Market

The creation, commercialisation, and sale of non-fungible tokens (NFTs) is not regulated by any specific Belgian laws and operates in a legal vacuum. NFTs that are considered as securities or financial instruments, such as fractionalised NFTs or NFTs linked to financial returns, could be regulated under securities laws in the framework of MiCA or under the Belgian financial laws. Most NFTs are considered digital collectibles or assets, and they are governed by more or less general consumer protection and tax rules. The Belgian NFT market is small, with few domestic projects in comparison with those on international platforms like OpenSea and Rarible, which Belgian users use to buy and sell. The tax treatment of NFT transactions is the same as for virtual currency and gains may be taxed as miscellaneous income or as business income. A lack of regulations could impede the development of domestic NFT ecosystems.

Key Regulatory Aspects

Aspect	Description
Legal Status	Cryptocurrencies are legal as crypto-assets under EU MiCA; not legal tender.
AML/CTF Compliance	Crypto service providers must register with FSMA and comply with 5AMLD rules.
FSMA Oversight	Supervises virtual currency commercialization since July 2022 for consumer protection.
MiCA Regulation	EU framework requiring authorization and transparency; applies by late 2024/2025.
Taxation	Profits taxed as miscellaneous income (33%) or business income; long-term gains may be exempt.
Market Integrity	Rules prevent insider trading and market manipulation, aligned with EU standards.

Conclusion

Belgium’s policy on cryptocurrency has been quite progressive when it comes to adoption although with caution in ensuring that the EU standards are followed and taking into account the needs of the locals. The formalization of legal status of cryptocurrencies in the shape of crypto-assets under the MiCA Regulation as well as national rules such as oversight by FSMA and compliance with AML/CTF is an organized, though not perfect, form. Taxation matters are clarified for speculative and professional activities, but accounting uncertainties are still on the agenda. Open international exchanges like Bitstamp and Kraken provide strong liquidity, but local platforms and the DeFi/NFT markets are behind due to regulatory uncertainty. The full roll out of MiCA, coming soon, will only bring more clarity and growth, a great place for Belgium to be in at the competitive EU crypto table. To successfully navigate this changing market, stakeholders should keep an eye on FSMA updates and MiCA developments.