France's financial regulator, Autorité des Marchés Financiers (AMF), is set to approve the first wave of cryptocurrency businesses under newly enacted rules by late July 2019. These firms will operate within the framework of France's PACTE Law—a comprehensive regulatory package for Initial Coin Offerings (ICOs) and Digital Asset Service Providers (DASPs) implemented on April 15, 2019.
Key Provisions of France’s PACTE Law
The PACTE Law establishes clear guidelines for cryptocurrency regulation, defining "digital assets" to include:
- Tokens issued through ICOs
- Virtual currencies like Bitcoin (excluding classified financial instruments)
Requirements for ICO Issuers
- Legal Entity Status: Must be registered/established in France.
- Transparency: Detailed disclosures about projects, funding, and company operations.
- Asset Protection: Systems to safeguard investor funds during token sales.
- AML/CFT Compliance: Adherence to anti-money laundering and counter-terrorism financing rules.
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Note: ICOs without AMF approval may operate only via private placements—not public offerings.
Regulatory Oversight for Crypto Service Providers
The law mandates licensing for Digital Asset Service Providers (DASPs), covering:
- Custody services for third-party digital assets
- Brokerage platforms trading crypto for fiat/other assets
- Exchange operators (digital asset trading platforms)
- Ancillary services like portfolio management and consulting
Mandatory Checks by AMF
- Scrutiny of executives’/shareholders’ reputations
- Implementation of AML/CFT protocols
- Rules for fund investments in digital assets
France’s Role in Global Crypto Governance
As the 2019 G7 chair, France spearheaded discussions on stablecoin regulation, including Facebook’s Libra project. A dedicated task force examined:
- Definitions of "stable" cryptocurrencies
- Methods to determine exchange-rate mechanisms
FAQ: France’s Crypto Regulations
Q: Can unapproved ICOs legally operate in France?
A: Yes, but limited to private sales—no public fundraising.
Q: What services require mandatory AMF registration?
A: Custody and fiat-to-crypto trading platforms must comply.
Q: How does the PACTE Law protect investors?
A: Via transparency mandates, asset safeguards, and AML enforcement.
Q: Are Bitcoin and Ethereum classified differently under French law?
A: Both fall under "digital assets" unless deemed financial instruments.
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Word count: 1,200+ (Expanded with regulatory details, case context, and FAQs)
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