French Regulator Revises Rule For Crypto In Accordance With MiCA

French Regulator Revises Rule For Crypto In Accordance With MiCA

The financial market regulator of France said that they are making changes to the rules applicable to crypto companies in the country in accordance with the new regulatory framework introduced for Europe.

The aim of the changes is to improve registration requirements for companies that are providing certain services related to digital assets, such as trading and custody.

Once made, the said changes would be implemented from the next year.

Regulation revamp

On Thursday, the French financial regulatory authority, Autorite des Marches Financiers (AMF), announced that they would amend their regulations and policies related to DASPs.

It said that these digital asset service providers (DASPs) would have their registration requirements ‘enhanced’.

The law that introduced the new requirements for crypto firms was abbreviated as DDADUE in French. It gave the Paris government the ability to transpose the directives of the European Union.

Earlier this year, the law had been adopted. Some clarifications were provided by the DDADUE law regarding the European legislation, Markets in Crypto Assets (MiCA).

The registration regime for companies would be ‘enhanced’ under the changes and would become mandatory, starting January 1st, 2024.

It would apply to market players interested in offering digital-asset related services, such as crypto-to-crypto trading, buying and selling tokens for fiat as well as custody.

‘Enhanced registration’

The AMF now wants to make amendments to its General Regulation and policy and the provisions would apply to all those digital asset service providers that have to follow ‘enhanced registration’.

Other than this objective, the regulator also wants to ensure that the requirements associated with DASPs in the country also align with the ones outlined in MiCA.

The European regulation mentions requirements that crypto asset service providers (CASPs) have to meet for obtaining authorization in Europe.

Crypto companies would have to fulfill different requirements to comply with the enhanced registration process.

This would include providing non-misleading and accurate information, making pricing policies public, implementing systems for conflict of interest management, and adequate internal control and security systems.

More requirements

Specific provisions have also been included in the requirements that relate to the custody of customer funds.

Companies would be required to segregate company and client assets and would not be allowed to use the former without obtaining express prior content.

The new French regulations come at a time when the global crypto industry is facing a clampdown from regulatory bodies.

The authorities have accused prominent crypto exchanges, such as the now-defunct FTX, as well as Binance, the largest crypto trading platform in the world, of commingling or diverting client funds.

The regulatory framework in France has been relatively clear due to which it has attracted a number of crypto firms, which include Binance, along with those targeting institutional investors.

General Benoit de Juvigny, the AMF Secretary, said back in June that American players were welcome to take advantage of the short French regime.

This is because, from the start of 2025, they would then have to deal with the European arrangements, as MiCA will then come into effect.