France Considers Rapid Tracking of Registered Crypto Companies to New EU Rules
The country’s financial regulator is considering a “fast-track” option for crypto businesses licensed in France to be regulated under the forthcoming Markets in Crypto-Assets (MiCA) rule.
The French Financial Markets Authority (AMF) welcomed MiCA’s approval in a statement issued on April 21 and explained how French regulation will proceed during the transition phase over the next 18 months.
AMF will be heavily involved in guiding the transition to MiCA regulation for French digital asset service providers (PSAN). The AMF added that it is currently considering “fast-track” options for these companies to get them to comply with MiCA legislation as soon as possible.
In terms of MiCA compliance, AMF seeks to bridge the gap in areas such as restrictions on provision of crypto enterprise funds, conflict of interest policies, and alignment of required documentation required under AMF and MiCA regulations.
On April 20, the European Parliament voted to enact the MiCA regulatory package, much to the delight of the crypto industry. MiCA now needs approval from the European Council in July before it can be formally enforced as a rule.
The law is tentatively scheduled to enter into force in early 2025, with the aim of establishing a clear and consistent regulatory framework for crypto assets among European Union (EU) member states.
In France, crypto businesses have two license options: a “simple” option with watered down criteria and a more stringent “enhanced” option, which is preferred by the government and is said to be closely linked to the MiCA law.
To enhance consumer protection, stricter alternatives include tighter controls around anti-money laundering rules, safeguarding customer assets, reporting to regulators, and providing extensive risk and conflict of interest disclosures.
All 60 crypto companies registered with the AMF in France are subject to the relaxed option and will remain so until they are transitioned to MiCA regulation. AMF has stated that any cryptocurrency companies that register after January 2024 will be required to do so under the heavier option.
Notably, AMF stated that any regulated company in either category will be allowed to sell its services only in France until it is transferred to MiCA. “These actors will be able to continue to offer their services to the French public only during this period,” the statement said, adding that “service providers approved under the MiCA regulations will be able to utilize European passports and provide their services in all EU countries.”