France Tightens Crypto Regulatory Environment

France Tightens Crypto Regulatory Environment

The French National Assembly has voted on new measures for crypto regulation, requiring a new set of compliance frameworks for new crypto firms registering operation in the country.

As market turmoil in the crypto industry has reached new heights in 2022, global regulators have been at the forefront of making sure that the industry is run safely and securely. As a result, France has been no exception to this heightened regulatory scrutiny, caused in part by the widening influence of crypto and blockchain-based technologies which, in turn, has also led to the proliferation of exploits and even large-scale fraud, as was the case with FTX, a now-defunct crypto exchange which embezzled billions worth of holdings.

Senator Hervé Maurey, representing the French Senate's Eure department, was among the first proponents of tigher crypto regulation in the country. Senator Maurey published an initially sketched proposal back in December 2022, at the height of the U.S. SEC's investigation on Sam Bankman-Fried. 

French solons voted 109-71 in favor of a bill which indexed plans for implementing new requirements on internal controls, cybersecurity procedures, and conflicts of interest. A previous note on the matter was published by the Autorité des marchés financiers (AMF/Financial Markets Authority), and was also voted positively by the French Senate. Sections from the bill state that new crypto firms who are in the process of obtaining a license will face new requirements from the regulator, with the said requirements being made in order to create a more viable and stable environment for crypto services and products across the market.

This is also in alignment with the country's efforts to abide by and conform to the European Union's legal initiatives to create the Crypto Assets Regulation (MiCA) and position it as a globally-recognized standard or rulebook for other nations to follow for their localized crypto regulations.

Top crypto exchanges such as Bitstamp and Binance have already acquired licenses for operation in France through the AMF, and will be exempted from the new categories, unless otherwise amended by the regulator.

The registration framework for new crypto firms in France involves audits on a prospective company's governance and anti-money laundering mechanisms, two fronts of crypto services which are often scrutinized for products or platforms that involve custody and trading, such as exchanges.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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