French regulators want to speed up supervision of crypto companies to avoid a new scandal.
The earthquake caused by the collapse of FTX, one of the largest cryptocurrency exchanges, sets in motion the regulators of the Paris financial center who recommend stepping up the march to protect users from “scabby sheep” and “rogue actors”.
“It is necessary that the crypto universe now clearly makes the choice of regulation and investor protection. It is in its interest, because bad apples easily bring an entire sector into disrepute,” Marie-Anne Barbat-Layani, president, launched on Monday of the Autorité des Marchés Financiers, during his greetings to the press.
This call comes as the world of crypto-assets is emerging from an annus horribilis symbolized by the resounding failure of one of the largest crypto-asset trading platforms, the American FTX, which has shaken other players in the ecosystem. .
Already on Friday the Banque de France had recommended greater regulation of the sector. In an article published on the Figaro website, the first deputy governor of the Banque de France, Denis Beau, highlighted “an adequate regulatory framework, vector of trust” also defended by the Prudential Control and Resolution Authority (ACPR), having ” the objective of allowing all competitors to be placed on an equal footing, without suffering the harmful consequences of ‘rogue’ actors”.
In concrete terms, French regulators are supporting the establishment of compulsory licenses for digital asset service providers (PSANs) in France ahead of the entry into force of the European MiCa regulation, which is currently under discussion.
Under the Pacte law, only registration is currently mandatory for PSANs wishing to carry out their activity on French territory. The authorization regime, which is optional, has more detailed information on investor protection and is more complicated to obtain. About 50 players are registered in France but none are approved, according to the AMF, which says it is “in favor of speeding up the transition to the compulsory approval system”. This is in line with an amendment tabled last month by centrist Senator Hervé Maurey.
The French association that brings together professionals in the digital asset sector (Adan) shares “the goal of better protecting investors and facilitating the transition to MiCa approval”. But “much less agrees with differentiating the timetable for the entry into force of an approval in France from that of the rest of the European Union,” Mélodie Ambroise, director of strategy and relations with the European Union, told AFP investors at Adam.
Risk of a severe blow
He currently points to “real hurdles to obtaining clearance,” particularly the difficulty for PSANs to obtain the professional indemnity insurance needed to secure the funds. Therefore, if approval becomes mandatory soon, Adan fears that “companies will go bankrupt”.
To avoid this blow, “the clear and non-misleading disclosure obligations that investment service providers already have could be put in place now, pending the MiCa,” proposes Adan. This new European regulatory framework is expected to enter into force in the first quarter of 2023, and to apply at the end of the first half of 2024.
A grace period can be granted to companies already registered: “there will indeed be a so-called grandfather clause”, said Barbat-Layani, saying she feared that there could be “at the last moment an influx of registrations with actors whose we’d be convinced they can’t cross the bar of approval afterwards.”
The MFA may de-list a Digital Asset Service Provider (PSAN), with the consent of the ACPR, on its own initiative or at the initiative of the ACPR, when the provider no longer complies with its registration obligations. In September 2022, the MFA decided to withdraw the registration as a digital asset service provider of Bykep SAS, effective immediately, following an audit.