For the past two years, when crypto gamblers first sat at the senator’s table and then discussed with MPs, Bruno Le Maire’s decree of December 9 has curtailed the ambitions of French crypto gamblers. How did we get there?
2018 good intentions
It is February 7, 2018, for the first time in France, the state is very interested in cryptocurrencies. It must be said that after a bitcoin touching the $ 20,000 and hype around it, it is hard to ignore the phenomenon! But when it came together, the volatility of the queen of cryptos eased the surrounding euphoria a little.
In this context, the representatives of the Autorité des Marchés Financiers (AMF), the Ministry of Finance, the Regulatory Control and Resolution Authority (ACPR) and the Banque de France met at a round table. France on one side and Coinhouse, Ethereum France and iExec on the other. The senators were able to ask their questions to better understand what blockchain and crypto assets are, but most importantly, to look for ways to regulate these new digital assets.
The key words of the 3-hour hearing will primarily be the fight against money laundering (ML) and the financing of terrorism (TF) on the institutional finance side and the strong demand for a clear legal framework on the institutional finance side of decentralized finance.
At the time, the AMF recommended setting an optional framework rather than a mandatory one so as not to affect the competitiveness of companies wishing to operate in France. The Banque de France previously stated that it uses a private blockchain internally, but does not provide any value for Bitcoin and other crypto assets. For its part, the Ministry of Finance wanted to separate the use of the blockchain from crypto assets.
To allay this fear, Coinhouse stated that from the first euro that was exchanged for cryptos, an ID card was requested and profiling was carried out.
One senator argued that money laundering is not the most common practice in the G20 and that there is no risk of being counterproductive.
Gerard Langlet, for his part, recalled that technological reality should not be at the service of excessive regulation of individual freedoms.
On December 26, 2018 (thanks to a regulation) a blockchain decree called Shared Electronic Recording Device (DEEP) was issued in extremis. Thanks to some technical inaccuracies, innovations could emerge that put France in the position of a “crypto-friendly” nation.
2019, PACTE law: AMF and PSAN visa
But make no mistake about letting the blockchain exist legally was mainly to better enforce it.
On May 22, 2019, the PACTE Act came into force and the term Digital Asset Service Provider (PSAN) appeared and was mainly framed. Two categories of providers are currently being created:
To qualify as a PSAN, you must exist in the real world like any other business. Decentralized exchanges (DEX) are therefore not affected by this obligation, as they are not subject to a central control body.
The first trouble arises at this point because not only is the procedure troublesome but also the file processing time is long. The main purpose of this measure was to protect the taxpayer from the risks associated with ICOs, and the AMF’s approval was intended to serve as a guarantee of quality for the company issuing the tokens.
In more than a year and a half, only 4 companies have received AMF approval.
Crypto companies operating in France had until December 18, 2020 to register. In this case, your agent could face two years in prison and a fine of 30,000 euros.
2020, ADAN and disenchantment
If it’s an extraordinary year, a lot has happened, including accelerating the digital transition around the world. The Association for the Development of Digital Assets (ADAN) was also founded earlier this year.
Given the difficulty crypto gamers have in making their voices heard, the creation of this association aims to represent them in order to be able to speak with a single voice with our elected representatives about the various recommendations of industry experts. In this desire for an ongoing dialogue with the state and transparency with the community, ADAN has published numerous reports and press releases on its website.
Unfortunately, the financial crisis in Europe has reshuffled the priority cards, and the difficulties facing French crypto players have only worsened.
In its inventory at the beginning of the 2020 school year, ADAN paints a rather negative picture of the attractiveness of the crypto ecosystem for France, despite the legislative avant-garde that the country has shown so far.
Little or no government support for start-ups, almost systematic refusal (89%) by banks to open an account for crypto players, or very restrictive administrative time to obtain a visa from the AMF. In addition, the PSAN status does not convince banks of the seriousness of a company wishing to start an activity in the field.
On the user side, 35% of respondents were denied a bank transfer to a cryptocurrency exchange or received additional confirmations to prevent them from making a purchase.
The coup de grace came on December 9, 2020 with an order tightening the regulations on the status of PSAN. While by then crypto exchanges & lt; & gt; Crypto was not affected by the requirement to have an AMF visa. You must now submit to this new legislation within 6 months, punishable by the prohibition of practicing on the territory.
In addition, the KYC (Know Your Customer) procedure has become more restrictive: Until then, only transactions with an amount of more than € 1000 were subjected to a user identity check – the first euro for which proof of identity is required. In addition to this proof of identity, a SEPA transfer must complete this process.
Enough to seriously question our elected officials’ real understanding of the international nature of cryptocurrencies who don’t know a country’s borders.
Two more decrees are expected to complete the legislative arsenal for cryptocurrencies by the end of the year. But what good is an authorization that no one is going to use if 64% of French crypto players plan to relocate their activities in September 2020?
I come from an artistic education and have a strong technical background. I’ve been working in the blockchain universe for several years, especially in the area of non-fungible tokens. My added value in this ecosystem is to make the challenges and opportunities of these new technologies accessible to as many people as possible.
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