France Crypto Rules Under Pressure
France is under pressure to fix a loophole in upcoming crypto legislation that would give an extended grace period to encourage digital asset businesses to set up shop in the nation with less regulatory monitoring.
Hervé Maurey, a member of the Senate's key finance committee, has offered an amendment to legislation that would remove a provision allowing registered crypto firms to operate in the country without a complete regulatory licence until 2026.
His action puts more pressure on the French Government and regulators over the country's crypto-friendly posture. More rigid EU standards will take effect in 2024, but France plans to keep its existing framework in place for another 18 months.
Critics' fears have grown this year as the values of popular tokens have plummeted, worsened by the collapse of Sam Bankman Fried's cryptocurrency enterprise, FTX, last month. On Tuesday, US authorities charged Bankman-Fried with crimes, including fraud.
France crypto position
France has attempted to position itself as one of the most appealing nations for crypto businesses to set up their office, bringing companies such as exchange operator Binance to Paris.
The existing approach permits crypto firms to register in the country without obtaining a full licence, allowing them to operate with limited oversight.
France crypto firms need to get a licence from regulator
Hervé Maurey’s plan would require corporations to get a licence from the French regulator, the Autorité des Marchés Financiers (AMF), beginning in October next year. Licencing, as opposed to registration, protects consumers and forces corporations to reveal more information about their financial health and control mechanisms. There are more than 50 cryptocurrency firms registered, but none have been awarded a licence.
According to critics, the France crypto existing setup may lead customers to believe regulators actively control crypto enterprises. "The safety afforded by this registration is deficient, if not non-existent," said Thierry Philipponnat, a former AMF board member who left in October.
The Senate approved the proposal on Tuesday. It will be considered by France's parliament in January next year. So far, the French Government has resisted the document, claiming that hastening regulatory requirements could scare away investors.
According to France's Adan, the proposed revisions indicate that the country is "renouncing its desire" to become a crypto centre, and the government is "abandoning an industry of the future" as a result of FTX's failure.
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