April 15, 2019

AMF, the French Financial Markets Authority, adopted a legal framework to oversee initial coin offerings (ICOs) and digital asset service providers (DASPs) in France. The PACTE draft Bill (Action Plan for Business Growth and Transformation) was adopted in the French National Assembly on April 11, 2019. Once enacted, the law will establish a framework for fundraising via the issuance of virtual tokens (ICO) and DASPs.

The regime covers digital assets not classified as financial instruments, giving rise to one or more rights and that may be issued, registered, stored, or transferred using a distributed ledger technology (or a blockchain). The law will enable project initiators to submit their information document to AMF for an optional visa, which will be issued on the condition that they meet certain requirements. The visa remains optional and the raising of funds without AMF visa will continue to be legal in France. However, issuers who have not received the AMF visa will not be able to use general solicitation. AMF will publish the list of ICOs that have received its visa. DASPs may be licensed and placed under the supervision of AMF. The term “digital assets” comprises tokens issued during ICOs and virtual currencies as defined by European law (such as the bitcoin). Financial instruments are excluded from this regime. This new optional status will cover a wide range of activities, particularly:

  • Custody of digital assets for third parties
  • Purchase or sale of digital assets against legal tender or other digital assets (broker/dealer)
  • Operation of a digital assets trading platform (stock exchange)
  • Other digital asset services such as the reception and transmission of third-party orders, third-party portfolio management, advice, underwriting, and placing on or without a firm commitment basis

Whether or not they choose to obtain the optional license, service providers that wish to provide digital assets custody services to third parties or to purchase/sell digital assets in exchange for legal tender are subject to mandatory registration with AMF. AMF may publish a “blacklist” of ICOs and digital assets services providers that do not comply with the regulations. It may also block access to fraudulent websites offering services in digital assets.

 

Related Link: Crypto-Assets Regime in France

 

Keywords: Europe, EU, France, Banking, Securities, Regtech, Fintech, Crypto-Assets, Distributed Ledger Technology, Blockchain, AMF

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