Belgium's financial regulator the FSMA is requiring virtual currency companies to add a short and punchy disclaimer to their advertising: 'Virtual currencies, real risks. The only guarantee in crypto is risk.'
The new rules will enter into force in less than two months after the regulator was granted the power to oversee crypto ad campaigns.
As well as the disclaimer, all advertisements must also contain a broader warning or a link or reference to such a warning. The broader warning should sum up the various risks in greater detail.
States the FSMA: "Virtual currencies are all the rage at the moment, but they involve considerable risk. There is no legal framework yet governing these products, and they have no underlying assets in the ‘real’ world. They are often subject to wild price fluctuations and are vulnerable to fraud and IT-related risks."
Mass media campaigns intended to hit more than 25,000 consumers must also be notified to the FSMA at least ten days in advance.
In addition, the FSMA will be investing in financial education about virtual currencies, including via an educational video that it is launching across schools today.
The watchdog is also working on a new game module for the Wikifin Lab, its financial education centre. The module is intended to make young people aware of the risks associated with virtual currencies. A first draft of the new module is currently being tested and will be launched at the beginning of the next school year.
"Some consumers want to earn money quickly by trading in virtual currencies. This goes hand in hand with great risks. In order to better protect consumers, the FSMA is stepping up the pace when it comes to supervision and financial education," says Jean-Paul Servais, chairman of the FSMA. "Thanks to the new Regulation, the FSMA will be able to check whether advertisements for virtual currencies are accurate and not misleading, and whether the advertisements contain the compulsory warnings of risk."