New regulation from the Belgian Financial Services and Markets Authority (FSMA) introduces stricter rules for ads for crypto assets. These include providing notice to the FSMA ten days before launching an advertising campaign. Also, a disclaimer at the bottom that states: “The only guarantee in crypto is risk.” Belgium’s latest crypto regulation has sparked a debate over how advertisers should talk about digital assets.
By popular demand, many banks have been adding crypto services to their financial offerings. Just this year, German Neobank N26 expanded its crypto trading services to Switzerland, Ireland, Belgium, and Portugal.
Naturally, N26 will want to share the news with existing as well as potential customers. However, the FSMA’s new mandates might undermine the offering, making it harder for customers to buy crypto.
Europe’s Changing Tides
All across Europe, legislators are moving fast to alter the way companies and individuals talk about crypto online. In France, lawmakers proposed an amendment to Bill 790 that effectively criminalizes promoting crypto on social media. The European Union has drafted a law that requires prohibitive requirements to cover risks associated with crypto.
Previously, many countries previously fostered a crypto-friendly landscape to welcome innovators. But in 2023, the tide seems to have shifted. And Belgium’s proposed crypto regulation seems punitive.
Not only has regulation targeted the main means of communication within the crypto ecosystem–the internet–but its language is markedly harsh. The full disclosure is “Virtual currencies, real risks. The only guarantee in crypto is risk.” This reads like an anti-crypto tagline in and of itself. It is obvious that the line was not written to inform customers of the risks inherent in all investing. Rather, to spook people away from crypto.
Intended Consequences of Belgium’s Crypto Regulation
Within the crypto industry and without, market conditions tend to define attitudes toward crypto both as a technology and an asset. In the wake of FTX, it’s easy to call all of crypto a scam. And in the middle of a brutal crypto winter, it’s easy to look at digital assets as a losing bet. However, most good investments extend far beyond a single bull cycle. The S&P 500 has highs and lows, after all.
This mindset needs to change, or countries might get stuck with restrictive regulations that stifle innovation. Furthermore, until lawmakers make a concerted effort to understand crypto, laws like these will continue. Disconnection between entrepreneurs and consumers will leave businesses without an audience and consumers locked out of opportunities.
Laws should protect citizens, but not by hurting good-faith businesses. As with any investment, gains are not guaranteed. But to say something intentionally ominous about an asset class is pointed in a way that the law should not be.
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