Newbies to face stricter Crypto laws in France

Newbies to face stricter Crypto laws in France

French Assembly have approved stricter bills for cryptocurrency firms, which now only need President Emmanuel Macron’s signature to become law. The action comes as the government is planning for new European Union regulations and market volatility. The country’s National Assembly voted 109 to 71 to approve a set of European Union laws, including an amendment setting stricter conditions on new players wishing to enter the French crypto market, while the 60 companies who choose the simpler registration under the country’s preexisting two-tier system will not be disrupted and will continue to do so until Europe-wide restrictions take effect. 

Companies in the country’s current system apply for simple registration with the local financial authority L’Autorité des marchés financiers (AMF) to operate, but they can also choose for full licencing, which involves additional disclosure. Notwithstanding this, none of the companies registered in France has chosen a higher level of licence.

The tightening of France’s regulatory environment was first advocated by Senator Hervé Maurey in December, referencing the collapse of the FTX crypto exchange and the necessity to eliminate loopholes before the EU’s Markets in Crypto Assets Regulation (MiCA) takes effect. MiCA regulation might be enacted as early as April this year, but it is unlikely to go into force until 2026. 

Initially, this reform was proposed to include the already registered crypto firms. This prompted criticism from the market and other parliamentarians. On February 16, the Senate voted with a compromise that withdraws the option of simple registration for new entrants to the market but enables current ones to continue functioning until the EU’s historic crypto regulations are brought into action. In the end, both houses of the French parliament have voted on a compromise measure that adds new registration requirements as of January 2024 but does not oblige companies to obtain a licence. 

France’s ambitions to position itself as Europe’s crypto centre have resulted in the establishment of companies like Binance and in the nation. But, the implementation of MiCA, which will unify crypto laws across the European Union, may pose a challenge to the country’s huge bet on the industry. Overall, France’s intention to tighten rules on crypto enterprises is a positive step for the sector since it gives a defined framework for businesses to thrive within while also protecting investors and the market as a whole.