The Belgian Financial Services and Markets Authority (FSMA) is getting set to gain major prominence in the cryptocurrency industry of the region.
This will come with certain regulations to guide the activities of crypto exchanges as well as other digital asset platforms in Belgium. Entities that intend to commercialize cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), and others will be expected to operate by this strict measure coined by FSMA.
The regulator wrote to the Belgian government for more authority over the crypto industry as the need for customer protection began alarming. The regulatory framework by FSMA will become effective from May 17th. It will address crypto advertising and certain requirements expected from firms.
“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,” FSMA Chairman Jean-Paul Servais said.
Crypto Industry Likened to Ponzi Schemes
From the inception of the nascent digital asset industry, many individuals and organizations have expressed their concerns about the speculative nature of crypto.
The volatility of the market was also another reason to worry, hence, cementing talks that virtual assets are high-risk assets. Tim Berners-Lee, inventor of the World Wide Web (WWW) was recently on an episode of CNBC’s “Beyond The Valley” podcast and he spoke about the danger of crypto.
To him, investing in cryptocurrency could be likened to getting involved in gambling because it is all about speculations. Governor of the Central Bank of Ireland Gabriel Makhlouf argued that this fast-growing industry would cause more harm than good to the economy of Ireland. Mere fact that cryptocurrencies do not have underlying assets, he believes that it is only a Ponzi scheme.
Considering all these, Makhlouf advised investors to perform their due diligence before investing in any digital asset. Similarly, Shaktikanta Das, the Reserve Bank of India (RBI) governor believes that cryptocurrencies “will undermine the authority of the RBI and lead to the dollarization of the economy.”
While many crypto enthusiasts have tried to douse the fire caused by such arguments, it is however noteworthy that the implosion of the FTX exchange caused a significant level of unrest. Currently, the United States is clamping down on crypto firms and financial institutions like Silvergate Bank, Signature Bank, and Silicon Valley Bank have been caught in the pandemonium.
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