Who do the rules apply to?
The regulatory regime applies to providers of services for the exchange between virtual currency and fiat currency and providers of custodian wallets that are established in Belgium. Automated Teller Machines (ATMs), which are machines that allow the exchange between virtual currency and fiat currency, that are located in Belgium but set-up by service providers from another EU-member state will also qualify as an ‘establishment’ and give rise to the application of the new regime for their operators.
What obligations do they have to comply with?
The service providers concerned will have to register with the Belgian Financial Services and Markets Authority (FSMA) to continue or commence their activities. Furthermore, they must permanently comply with a number of registration and business requirements, which the FSMA will monitor. The latter requirements mainly relate to the following topics:
- The fit and properness of the effective management;
- The suitability of the shareholders;
- The internal organisation;
- Minimum capital requirements (i.e. EUR 50,000); and
- Compliance with anti-money laundering and anti-terrorist financing rules (e.g. customer identification).
Failure to comply with the obligations under the new regime may result in criminal and administrative penalties.
The regulatory regime for this type of service provider stems from the transposition of the 5th AML Directive. In Belgium, the regime is included in the Law of 18 September 2017 on the prevention of money laundering and terrorist financing and on the restriction of the use of cash, and the new executing Royal decree of 8 February 2022 on the status and supervision of providers of services for the exchange between virtual currency and fiat currency and providers of custodian wallets (the “Royal Decree”). The Royal Decree applies from 1 May 2022.