French Lawmakers Mandates Crypto Firms to Seek Authorization by 2024
France lawmakers mandate companies operating in France seek authorization from the financial regulator by December 31 2023. The national assembly proposals on January 17 provided a generous timeline for crypto companies to comply with the registration requirements. The new directive adopted on Tuesday offers a longer time than granted by the Senate to crypto firms still unregistered with the country’s regulator.
National Lawmaker Move Compliance Timeline
The directive aligns with the proposed EU crypto law dubbed Markets in Crypto Assets (MiCA) regulation. Explaining the new proposal, the national assembly lawmakers indicated that postponing the deadline to January 1 next year offers a leeway to ensure complete compliance. The Senate had in December 2022 directed the crypto firms to comply with the October 2023 cut-off date. Most French senators argued that strict compliance with the new directive aims to stop crypto firms from contravening the MiCa regulation.
Postponing the deadline is critical to enable new crypto entrants to utilize the additional time to seek authorization. The lawmakers considered the authorization process complicated, hence the need for more time. Daniel Labaronne, the lead lawmaker on the new legislation within the Assembly’s Finance Committee, supported the new timeline. Similarly, the Financial Markets Authority (FMA) could also utilize the additional months to process the applications from existing and new crypto firms.
Reasons for Amending the French Laws
Labaroone considers that failure to amend the proposals would leave French investors vulnerable to firms operating with registrations only to benefit from the MiCA clauses. In particular, the lawmaker considers the amendment inevitable to seal loopholes where the MiCA provisions allow firms to operate without gaining a full license until the deadline lapse in March 2026.
The financial committee adopted Labaronne’s proposals, now awaiting approval from the National Assembly next week. Also, the proposals are subject to negotiations with the Senate.
Adopting stringent regulatory oversight is perceived by French lawmakers as critical, citing the need to avert recurring FTX collapse. Senator Herve Maurey indicated that current French laws yield a lighter registration process, thereby circumventing the authorization process. The latter involves a detailed assessment of financial resources and business operations.
The approval of the proposals would mandate many crypto firms, including Societe General and Binance, to seek authorization as they are only registered.
The proposals are attracting criticism from quarters arguing that stringent regulations could extinguish France’s pursuit of establishing a crypto hub.
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