France moving forward in blockchain regulation
In an interview with Best Lawyers, Geoffroy Goubin of Bougartchev Moyne Associés, shared his thoughts on cryptocurrency projects in France and the country's attempts to promote growth in the industry, revealing some very interesting developments.
On 22 May 2019, the French government enacted the Law n°2019-486, allowing an optional visa for ICOs. Any token issuer wishing to make an initial coin offering may request a visa from the French Financial Market Authority (Autorité des Marchés Financiers (AMF), a French independent public body with a remit to safeguard investments in financial products, and is responsible for verifying the white paper.
The Law also provided for optional visa for service providers for tokens and cryptocurrencies, covering a wide range of activities, such as:
the preservation/custody of digital assets on behalf of a third party;
the purchase and sale of digital assets against legal tender or other digital assets (brokerage);
the operation of a digital asset trading platform (exchange);
other services on digital assets such as receiving and transmitting orders on behalf of third parties, portfolio management on behalf of third parties, advice, underwriting, guaranteed investment and non-guaranteed investment.
Approved service providers are also subject to a common set of rules. A decree and the AMF General Regulations specify the details of these above services.
Whether or not they choose to obtain a visa, service providers wishing to preserve digital assets on behalf of a third party, and purchase and sale of digital assets for fiat currency, must be registered with the AMF. The AMF will consider whether the service provider meets the following criteria:
a good repute and competence of their managers and shareholders;
the existence and implementation of procedures to fight against money laundering and terrorist financing.
The Law also allows for two types of funds which will now be able to invest in digital assets:
specialized professional funds, subject to compliance with the liquidity and valuation rules applicable to them;
and professional private equity funds up to 20% of their assets.
New offences have been introduced into the French Monetary and Financial Code and Commercial Code, which incriminates certain behaviors, such as:
not registering with the AMF when registration is mandatory
a token issuer publishing inaccurate or misleading information.
These legal developments come despite comments from the French finance minister, Bruno Le Maire, suggesting that Libra could not move ahead in France until concerns over consumer risk and governments’ monetary sovereignty were addressed.