Belgium -- Licensing Requirements Regulatory Overview

Belgium, like other EU member states, primarily regulates Virtual Asset Service Providers (VASPs) through an Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) lens. This means the current regime is one of registration rather than a full prudential licensing regime, at least until the EU's Markets in Crypto-Assets (MiCA) Regulation becomes fully applicable.

The competent authority in Belgium for the supervision of VASPs for AML/CTF purposes is the Financial Services and Markets Authority (FSMA).

1. Current Regulatory Regime: Registration with the FSMA

The Belgian framework is based on the transposition of the EU's 5th Anti-Money Laundering Directive (AMLD5) into national law, primarily through the Law of 18 September 2017 on the prevention of money laundering and terrorist financing and on the restriction of the use of cash.

Any natural person or legal entity established in Belgium that provides one or more of the following services to third parties, on a professional basis, must register with the FSMA:

Required Licenses/Registrations for Specific Activities:

1. Exchanges (Virtual currency exchange services):

   • Required: Registration with the FSMA.
   • Scope: This includes services for the exchange between virtual currencies and fiat currencies, as well as exchange services between one or more virtual currencies.

2. Custody Providers (Custody wallet providers):

   • Required: Registration with the FSMA.
   • Scope: This covers services that provide the safekeeping and management of virtual currencies on behalf of clients, including holding private cryptographic keys.

3. Payment Processors:

   • Nuance: The requirements for payment processors depend heavily on the nature of the services provided.
   • If facilitating crypto-to-fiat exchange or providing custody: If a payment processor facilitates the exchange between crypto and fiat currencies (e.g., enabling merchants to accept crypto and receive fiat), or provides custody of virtual assets for clients, then registration with the FSMA as a VASP is required.
   • If purely crypto-to-crypto payments without custody/exchange: If the service solely facilitates crypto-to-crypto payments without providing custody or facilitating conversion to/from fiat, it might not strictly fall under the current VASP registration requirements. However, the FSMA would assess the specific business model.
   • If traditional fiat payment services: If the payment processor deals predominantly with fiat currency payments, even if related to crypto transactions, they might fall under the scope of the Payment Services Directive 2 (PSD2) and require authorization as a Payment Institution or Electronic Money Institution by the National Bank of Belgium (NBB), which is a separate and much more extensive licensing regime.

2. Registration vs. Licensing Regime

It is crucial to distinguish:

• Current Regime (Belgium): It is a registration regime, primarily focused on AML/CTF compliance. It does not imply a full prudential licensing similar to banks, traditional investment firms, or e-money institutions. The FSMA grants "registration" but does not "license" in the broader financial sense that implies comprehensive prudential oversight of capital, risk management beyond AML, consumer protection, etc.
• Future Regime (EU MiCA): The upcoming EU Markets in Crypto-Assets (MiCA) Regulation will introduce a comprehensive, harmonized licensing regime across the EU for a much broader range of crypto-asset services. This will supersede the current national AML-driven registration frameworks for many activities.

3. Key Requirements for FSMA Registration

Applicants must demonstrate robust compliance with AML/CTF obligations and sound operational practices. Key requirements include:

1. AML/CTF Program:

   • Customer Due Diligence (CDD): Robust procedures for identifying and verifying the identity of clients, including beneficial owners.
   • Risk Assessment: A comprehensive risk assessment of AML/CTF risks associated with the business activities, client base, products, and geographical areas.
   • Suspicious Transaction Reporting (STR): Clear procedures for identifying and reporting suspicious transactions to the Belgian Financial Intelligence Unit (CTIF-CFI).
   • Internal Controls & Monitoring: Effective internal controls, policies, and procedures to prevent ML/TF.
   • Training: Regular AML/CTF training for all relevant personnel.
   • Record-keeping: Maintenance of relevant records for the prescribed period.

2. Governance and Management:

   • Fit & Proper: Directors, managers, and significant shareholders must demonstrate appropriate professional competence, experience, and integrity (good repute).
   • Organizational Structure: An adequate organizational structure, sound administrative and accounting procedures, and effective internal control mechanisms.
   • Risk Management: Policies and procedures for identifying, assessing, managing, and mitigating operational risks.

3. Local Presence:

   • The applicant must be a legal entity established in Belgium or a natural person residing in Belgium.
   • Its central administration must be located in Belgium.
   • Effective management must be performed from Belgium.

4. Capital Requirements:

   • While the current AML registration regime does not prescribe a fixed minimum capital requirement akin to traditional financial licenses, the FSMA expects applicants to demonstrate sufficient financial robustness and resources to ensure the continuity and proper functioning of the business, cover operational risks, and maintain solvency. This is assessed on a case-by-case basis based on the nature, scale, and complexity of the proposed activities. MiCA, however, will introduce specific, higher capital requirements.

5. Technology and Security:

   • Robust IT systems and security measures to protect client assets and data, manage operational risks, and ensure the integrity of transactions.
   • Business continuity planning.

4. Application Process

The application process for registration with the FSMA typically involves several stages:

1. Pre-Application Contact: It is advisable to contact the FSMA to discuss the intended activities and obtain preliminary guidance.
2. Preparation of Application File: This is a comprehensive submission that includes:
   • A detailed business plan.
   • Comprehensive AML/CTF policies, procedures, and risk assessments.
   • Information on the applicant's corporate structure, governance arrangements, and internal controls.
   • Fit & Proper questionnaires and supporting documents for directors, managers, and significant shareholders.
   • Evidence of sufficient financial resources.
   • Details on IT systems, security measures, and data protection.
   • Legal opinions where necessary.
3. Submission to FSMA: The complete application file is submitted to the FSMA.
4. Review and Assessment: The FSMA reviews the application, which may involve:
   • Requesting additional information or clarification.
   • Interviews with key personnel.
   • Potentially on-site visits.
5. Decision: The FSMA will either approve the registration, impose specific conditions, or reject the application.
6. Entry into Public Register: Upon approval, the VASP's details are entered into the FSMA's public register of registered VASPs.

5. Specific Regulatory References

• FSMA's Dedicated VASP Page: This is the primary resource for current information and guidance.

  • https://www.fsma.be/en/virtual-asset-service-providers
  • This page typically contains direct links to relevant legislation, forms, and FAQs.

• Law of 18 September 2017:

  • Loi du 18 septembre 2017 relative à la prévention du blanchiment de capitaux et du financement du terrorisme et à la limitation de l'utilisation des espèces. (In French)
  • Wet van 18 september 2017 tot voorkoming van het witwassen van geld en de financiering van terrorisme en tot beperking van het gebruik van contanten. (In Dutch)
  • This law is the main transposition of AMLD5 into Belgian law. You can usually find it on the official Belgian government legislative database (e.g., https://www.ejustice.just.fgov.be/loi/loi.htm by searching for the date).

• EU 5th Anti-Money Laundering Directive (AMLD5):

  • Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018 amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, and amending Directives 2009/138/EC and 2013/36/EU.
  • https://eur-lex.europa.eu/eli/dir/2018/843/oj

6. Future Outlook: MiCA Regulation

The EU's Markets in Crypto-Assets (MiCA) Regulation is a landmark piece of legislation that will significantly transform the regulatory landscape for crypto-assets across the EU, including Belgium.

• Applicability: MiCA's rules for crypto-asset service providers (CASPs) are expected to become fully applicable in late 2024 or early 2025.
• Key Changes under MiCA:
  • Licensing, not just Registration: MiCA introduces a full licensing regime for a broader range of activities (issuance, operating trading platforms, custody, advice, portfolio management, transfer services).
  • Harmonized EU Framework: A single license obtained in one EU member state will allow for "passporting" services across the entire EU.
  • Broader Scope: Regulates various types of crypto-assets (excluding NFTs, but potentially covering stablecoins and e-money tokens).
  • Increased Requirements: Significantly higher capital requirements, comprehensive operational resilience, robust consumer protection rules, detailed market integrity rules, and stricter governance.
  • Supervision: The FSMA (and potentially the European Securities and Markets Authority - ESMA for certain CASPs) will be responsible for supervising compliance with MiCA.

Once MiCA is fully implemented, the current national AML-focused registration regime for VASPs in Belgium will be largely superseded by the MiCA licensing framework for the activities it covers. Businesses currently registered in Belgium will need to assess their readiness for MiCA and potentially apply for a MiCA license.

Disclaimer: This information is for general informational purposes only and does not constitute legal, financial, or regulatory advice. Specific legal advice should be sought from qualified professionals regarding individual circumstances. The regulatory landscape for virtual assets is constantly evolving.