France is considering an obligation for cryptocurrency firms to obtain a full licence in the wake of the recent bankruptcy of FTX.
The French government has expressed concerns over the lack of regulation and oversight in the crypto space, and is now looking to introduce a new system that would require companies to obtain licences before they can operate.
Up until now, the French rules for the crypto sector allowed companies to operate without a full licence, and a date of 2026 was given by which time all crypto firms would have to have the full licence in order to continue operating.
MiCA and FTX force the arm of French lawmakers
With French lawmakers now wishing to align themselves with the incoming European MiCA regulations, the 3 year period of grace for crypto platforms operating in the country could be scrapped and they may be obliged to apply for a full licence as early as next year.
The proposed system would be similar to existing financial regulations, with firms needing to meet certain criteria before they are allowed to operate. This could include having adequate capital reserves, as well as providing proof that their operations are compliant with anti-money laundering laws. Companies would also need to demonstrate that they have sufficient internal controls in place and adhere to industry best practices.
The move comes after FTX filed for bankruptcy earlier this year, leaving customers out of pocket and raising questions about the lack of oversight in the crypto space. The French government is now hoping that by introducing a licensing regime it can provide greater protection for consumers and ensure companies are operating within legal parameters.
Fair regulation needed
Some may say that tighter regulations would build trust among investors and create an environment where companies can thrive while still adhering to legal requirements.
This could come to pass, but those within the crypto industry as well as those looking to invest in its technologies will want to see fair regulation that enables the industry to carry on innovating without being hogtied by cumbersome rules.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
