The French National Assembly met on the evening of January 24 to decide on an amendment proposed last December by the senator from Eure (Normandy) Herve Maurey Filed in the midst of the panic caused by the fall of FTX, this amendment aims to impose PSAN approval on any actor offering crypto assets on French territory, from October 1, 2023 at the latest. A measure which, postponed by deputies, put the French crypto ecosystem under threat of legal suffocation.
“The sector has been listened to”
Had this text been adopted as it is, there is no doubt that French cryptocurrency players would have been hampered in their development and forced to go into exile in countries with more lenient legislation. The vote of MEPs, therefore, which rejected this proposal to make PSAN (Digital Asset Services Provider) certification mandatory for any actor offering crypto assets on French territory, before October 1, 2023, is a relief.
Engaged in tough negotiations with political spheres and listening to the crypto business sector, the Adan (Association for the Development of Digital Assets) immediately after the results of the vote welcomed the decision taken by the Assembly.
The association declared in a tweets :
Instead of this device, bad for crypto players who want to develop France, users have thus pushed themselves into the arms of less secure actors and the authorities must prepare themselves Not – MEPs wanted to opt for a more balanced solution.
This less drastic solution consists of imposing, only on new entrants in the sector, an “enhanced” PSAN registration with the MFA, which will ensure greater transparency in order to avoid, among other things, situations of conflict of interest.
In fact, the obligation to obtain, by the end of the year, the PSAN license issued by the Autorité des Marchés Financiers would have had, for the players already registered with the Authority, the effect of a last thunder in the sky still full of the storms died out in 2022 and many of them could very well have put the key under the door.
And Adan to conclude his Twitter thread dedicated to this vote by summarizing the challenges facing cryptocurrency players in France, but also the government (since the Finance Minister, Bruno Le Maire, said he wants to make sure that France, in Europe, the base camp “of crypto and DeFi) is moving:
Fight against unfair competition by guaranteeing compliance with existing rules and MiCA tomorrow; remove the obstacles that tomorrow could prevent the PSAN comply with MiCA and carry on your business; advocate of global regulatory harmonization.
All in all, a good program. But one thing at a time.
France will settle for MiCA
Crypto companies in France can catch their breath. But quickly, because the steps to which the latter will have to submit in the context of the entry into force of the European text of the Mica law scheduled for 2024, will not be child’s play. The mandatory approval of the PSANs by the financial authorities, in fact, is part of the legal provisions of the text voted by the European Parliament. Naturally, as the calendar is more extensive with MiCA, ecosystem players have time to prepare.
Fortunately, because today getting PSAN approval is simply inaccessible for crypto companies, even with the best will in the world. Of the nearly 60 crypto players registered with PSAN in France, none are approved. Industry stalwarts like Binance, Kraken, and Coinbase are unlicensed, all of these companies are simply registered.
The supporting documents needed to get approval are simply inaccessible to crypto companies, like professional indemnity insurance. Insurers fleeing crypto players like the plague condemn companies to the impossibility of acquiring the required insurance and therefore of finalizing their file for approval by the PSAN, even the most reputable of the ecosystem.
A trend in the insurance world that could wither due to the harmonization of legal frameworks for matters relating to crypto assets.
As a reminder, France is now a leader in regulating digital assets; has adopted a two-step system: (1) mandatory registration with the MFA, which is quite easy to obtain, and (2) approval, which is much more complex to obtain.
The Action Plan for Business Growth and Transformation (PACTE), a law adopted in 2019, aims to promote business growth and transformation in France. It contains measures to facilitate business creation, enhance the protection of minority shareholders, enhance corporate transparency and promote innovation. It has especially benefited French cryptocurrency players by allowing them to register as a PSAN with the AMF, which has provided them with a regulatory framework within which they can experiment with innovation.