In a significant move to simplify crypto regulations in the French market, the French financial regulator, Autorité des marchés financiers (AMF), has announced a strategic modification to the registration requirements for cryptocurrency companies operating within the nation. This pivotal step aims to bring French regulations in line with the European Union’s Markets in Crypto-Assets Regulation (MiCA) and foster a more secure and regulated landscape for digital asset service providers (DASPs).
Enhanced Registration Requirements Will Take Effect From 1 January 2024
The AMF, France’s financial regulator, has unveiled a new provision, Article 721-1-2, as part of the AMF General Regulation, targeting digital asset service providers (DASPs) operating within the country. The change is poised to extend the purview of DASP licenses to encompass entities subject to “enhanced” registration, marking a significant shift towards comprehensive industry oversight.
The enhanced DASP registration framework addresses multiple facets of operation, covering vital areas such as security protocols, conflict of interest management, transparent information disclosure, and public pricing policies. This proactive approach, which reflects France’s commitment to investor safety and industry integrity, also outlines specific custody provisions, safeguarding the segregation of client assets from a company’s own holdings. Moreover, companies must now secure explicit prior consent before using client assets and maintain a signed agreement with their clients to ensure a clear understanding of operations.
These changes will become effective on January 1, 2024, thereby encouraging applicants for enhanced DASP registration to align their documentation with the new standards.
While France propels its crypto regulatory environment into the future, it remains conscious of existing players. DASPs that secured simple registrations prior to January 1, 2024, will continue to operate under the previously applicable framework due to the “grandfather” clause.
France Aligns With EU MiCA Standards
The Alignment of DASP (Digital Asset Service Providers) licenses with the MiCA (Markets in Crypto-Assets) Regulation is set to come into effect from January 1, 2024. The amendments, primarily found in Book VII of the General Regulation, focus on harmonizing the regulations governing licensed DASPs with the provisions outlined in Title V of the MiCA Regulation that pertains to providers offering services for crypto-assets, known as CASPs.
The alignment of requirements between DASP licenses and MiCA authorization is poised to indirectly impact enhanced registered DASPs, as these changes will extend to this category as well.
Furthermore, Instruction DOC-2019-23, which outlines guidelines for DASPs, has been revised to closely align the necessary documentation required for enhanced registration and optional licenses with the stipulations laid out in the MiCA Regulation. This step signifies a concerted effort to streamline and standardize the documentation process for both DASPs and CASPs.
In March, the French legislative body gave its nod to a series of regulations for cryptocurrency firms. These regulations are now awaiting the final approval of President Emmanuel Macron to become legally binding.
With a voting margin of 109 to 71, the members of the National Assembly in France voted in favor of adopting a comprehensive set of European Union legislations. These legislative changes include an amendment that enforces more rigorous prerequisites for potential entrants aiming to participate in the dynamic French cryptocurrency market.
Societe Generale’s crypto division has achieved a noteworthy milestone as it becomes the recipient of the initial crypto license issued by the AMF. Notably, regulatory registration also includes prominent entities like Binance and Hex Trust.
