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Initial Coin Offering in Belgium

Initial Coin Offering in Belgium

An initial coin offering in Belgium is a manner in which a company can raise the funds needed to create a new coin, app or service, generally related to blockchain and cryptocurrency technology.

The funders receive the new cryptocurrency token in exchange to their contribution or, in some cases, can gain access to preferential services as they become available.

The initial coin offering, or ICO in Belgium, can be seen as an equivalent of the initial public offering, the IPO.

Interested investors who wish to organize an ICO need to be mindful of the regulations in the jurisdiction where they intend to perform the launch.

Our team specializing in company formation in Belgium answers some of the most common questions concerning ICOs in this country.

How are ICOs regulated in Belgium?

While ICOs and cryptocurrencies are not thoroughly regulated in Belgium, the country’s regulator has issued information on how these activities can be subjected to relevant regulations that apply in the country, such as the ongoing directives for the prevention of money laundering.

The Financial Services and Markets Authority has issued a communication in 2017 concerning the initial coin offering in Belgium, targeting both the offerors and the consumers.

What are the relevant laws for initial coin offerings in Belgium?

Our agents list the main local laws, which apply in addition to the European regulations:

  • – the FSMA regulation on the distribution ban of certain financial products to retail clients;
  • – Law of 16 June 2006 on public offers of investment instruments;
  • – Law of 18 December 2016 on the regulation of crowdfunding; this law also includes information on the authorization needed to become a recognized alternative finance platform.

If you want to open a company in Belgium that will be involved in an ICO afterward, our team can give you details about these laws.

What do ICO launchers need to be mindful of?

When launching an ICO in Belgium, the offerors are required to keep a number of good practices in mind:

  • · Prepare a through white paper: this is the informational document that includes information about the business idea, the products and the technology;
  • ·  Background checks: perform a due diligence on the ICO participants;
  • ·  Developers: the creators of the new token or technology should be disclosed, along with relevant information about their expertise; the project should be a product, not merely an idea;
  • ·  Smart contract: this is the code, which can be embedded into the blockchain, allowing the distribution of the new tokens; writing this “contact” is one of the most important steps; ICOs without the smart contract are not considered trustworthy.

The project should have a realistic objective and the ICO should aim to gather an amount of capital that is proportionate to the anticipated value of the project.

According to Statista, ICO values peaked during the first quarter of 2018 when they amounted to 6.88 billion USD:

  • –  3.45 billion USD were raised through ICOS in the forth quarter of 2017;
  • –  the total value of capital gathered through ICOs in the second quarter of 2018 was 4.3 billion USD;
  • –  the total amounts raised through ICOs decreased in 2019, amounting to 120 million USD.

Assistance for entrepreneurs in Belgium

Our Belgium company formation agents assist investors who wish to start a business, as well as those who have already incorporated a legal entity and with to know more about the applicable regulations in different business fields.

We assist investors who wish to open a locally registered company, as well as those who wish to set up a branch.

Part of our post-registration services include bank account opening services.

If you want to know more about initial coin offering in Belgium, the applicable laws and good practices, you can reach out to our specialists in company formation for financial services providers.

Contact us for complete details on our incorporation packages.