France’s New Crypto Legislation
France has published plans to tighten regulations for crypto firms starting from January 2024. The new registration conditions will require companies to meet additional internal controls, cybersecurity, and conflicts of interest rules. This is a more pragmatic approach compared to the previous Senate position that would have required companies to seek a license. The legislation agreed upon by the Joint Committee is set to be approved by the Senate on February 16 and the National Assembly on February 28.
Currently, crypto firms can register with the Financial Markets Authority (FMA) to demonstrate compliance with basic money laundering and governance norms. However, no operator has received a license, which is a more rigorous procedure that also requires financial resources and business conduct checks. Faustine Fleuret, President of the crypto lobby group ADAN, stated that the enhanced registration procedure is a positive step, but warned that the new requirement for resilient and secure IT systems could be difficult for small companies to meet and for regulators to enforce.
Senator Hervé Maurey proposed the tightening of regulations in the wake of the FTX collapse and to ensure that French law does not offer a loophole from complying with the new European Union rules known as the Markets in Crypto Assets regulation. Maurey’s original plans would have required any unregistered crypto provider to seek a license as of October, which industry lobbyists said could have been unworkable.
The regulations for crypto firms in France aim to create a balance between the protection of investors and the growth of the industry. The enhanced registration procedure will provide additional safety measures for investors, while the requirement for secure IT systems will ensure that companies are equipped to handle sensitive financial information. However, the new regulations could also present a challenge for small companies, as they may struggle to meet the additional requirements.
The crypto industry in France is growing, and the new regulations aim to keep pace with this growth and ensure that the industry continues to flourish. The enhanced registration procedure will provide a framework for companies to operate within and will provide investors with greater confidence in the industry. The regulations will also help to prevent potential future incidents such as the FTX collapse and will ensure that French law aligns with EU regulations.
In summing up the new regulations for crypto currency companies, France are in a step in the right direction and will provide greater security and protection for investors interested in the crypto industry. The enhanced registration procedure will ensure that companies are meeting basic money laundering and governance norms, while the requirement for secure IT systems will protect sensitive financial information. The new regulations aim to balance the protection of investors with the growth of the industry and will ensure that French law aligns with EU regulations.
