Following the demise of FTX, a French Senator proposed tightening crypto regulations. The decision comes as the European Union’s Markets in Crypto Assets (MiCA) initiative nears completion.
The Financial Times reported on Thursday that France is under increasing pressure to fill gaps in its crypto regulations.
Currently, France provides a window with less regulatory oversight to attract cryptocurrency companies. Senator Hervé Maurey of the Finance Commission is reportedly planning to amend the provision. This includes prohibiting registered cryptocurrency companies from conducting domestic business without a full regulatory license until 2026.
The publication of the report coincides with the European Union’s preparations for the full implementation of Markets in Crypto-Assets (MiCA) legislation in 2024. In France, Digital Asset Service Providers (DASPs) must register and comply with AML/CFT regulations. However, the registration does not appear to require a license. According to the report, France has 50 registered companies, all of which are operating without a license.
One of the reasons France is one of the top twenty crypto economies, comfortably ranking among the most “business-friendly” countries.
Notably, in October, the French financial regulator approved SG Forge, one of the country’s oldest banks, foraying into cryptocurrency services. Binance was also able to obtain registration in France this year.
Because of their direct or indirect exposure to the exchange, several other businesses have been destroyed as a result of FTX’s bankruptcy. Furthermore, investors have lost billions of dollars, prompting regulators to tighten regulations.
“The FTX collapse was a detonation that contributed to a moment of reckoning and awareness,” Maurey told the Financial Times. This prompted a number of players in the French system to believe that things needed to be more closely monitored.”
If the Senator’s proposal is approved, businesses would be required to obtain a license from the French regulator, the Autorité des Marchés Financiers (AMF), beginning in October 2023.
This week, Hong Kong and Canada announced that they would strengthen crypto laws to prevent future occurrences similar to FTX. Senators in the United States are also urging Congress to regulate cryptocurrency through a new bill.