France’s Warning on Crypto Firms Operating Under MiCA Licenses
France has issued a warning that it might take steps to block cryptocurrency firms operating locally under licenses acquired in other European nations, raising concerns about enforcement gaps within the European Union’s crypto regulatory framework.
The Autorité des Marchés Financiers (AMF), France’s securities regulator, expressed its worries to Reuters on Monday regarding potential regulatory enforcement gaps related to the EU’s Markets in Crypto-Assets Regulation (MiCA), which is the world’s first comprehensive regulatory framework for cryptocurrencies.
Fearing that some crypto companies might pursue licenses in EU jurisdictions with more relaxed regulations, the AMF is contemplating a prohibition on crypto firms operating in France using MiCA licenses obtained from other member states.
Marie-Anne Barbat-Layani, the AMF chair, informed Reuters, “We do not exclude the possibility of refusing the EU passport,” further noting that the situation is “very complex,” and could be likened to an “atomic weapon” for the market.
She added that crypto firms are searching for a “weak link” among European jurisdictions that would issue a “license with fewer requirements than the others.”
With MiCA taking effect for crypto asset service providers in December 2024, companies authorized in one member state can utilize a “passport” to operate throughout the 27-nation bloc. France’s warning underscores fears that inconsistent standards might weaken the framework.
Support for ESMA to Supervise Major Crypto Firms
France has become the third country to suggest that the Paris-based European Securities and Markets Authority (ESMA) should take over the oversight of major crypto firms, as reported by Reuters, which referenced a position paper reviewed by its journalists.
- Austria’s Financial Market Authority
- Italy’s financial markets regulator, Commissione Nazionale per le Società e la Borsa
These three countries have also supported amendments to MiCA, advocating for stricter regulations concerning crypto activities outside the EU, enhanced cybersecurity oversight, and a reevaluation of the regulatory approach to new token offerings.
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This discussion comes amid increasing criticism of Malta’s crypto licensing system. In July, ESMA published a peer review of the Malta Financial Services Authority’s authorization of a crypto service provider, concluding that the regulator only “partially met expectations.”
Following the review, the ESMA’s ad hoc Peer Review Committee (PRC) recommended that the MFSA should “assess material issues that were pending at the date of the authorization or that have not been adequately considered at the authorization stage.”
The PRC also indicated that Malta’s MFSA “needs to monitor closely the growth in authorization applications” and make timely adjustments to its supervisory practices.
