Regulation in France: the AMF proposes a regulatory sandbox to support the security token sector

In France, the financial market authority (AMF) intends to support the growing industry of security tokens by issuing dedicated regulation.

This is an experimental initiative aimed at regulating this niche sector, in a context where current legislation is incompatible with its growth.

On the other hand, in the United States the approach of regulators seems to be more aggressive and less collaborative: recently the SEC has targeted Uniswap as an alleged unregistered security exchange.

All the details below.

France: the new regulation to support security tokens

In France, the body dedicated to market supervision is going against the current compared to other financial authorities in the country, proposing a digital sandbox to regulate the growing security token industry.

The aim of the AMF is to promote the use of blockchain in its entirety as an emerging technology, despite financial regulations such as MiFID and CSDR being against security tokens by imposing registration requirements with the competent authorities.

This kind of cryptographic coins, identified as securities (common enterprise) on which potential buyers expect to make a profit thanks to the efforts of others (see Howei Test), currently do not even fall under the scope of analysis within the vast set of rules contained in MiCA.

For this reason, the AMF, which has been supporting a proactive approach towards blockchain and digital tokens for years, wants to distance itself from current regulations and launch a pilot project aimed at monitoring the performance of this niche while waiting for Europe to send clearer messages.

The problem at the moment, as recalled by the president of the AMF Robert Ophèle himself, is that Europe cannot adopt new regulations for blockchain and security tokens overnight.

“We are faced with the paradox of the egg and the chicken. Space cannot develop within the current framework, but without documentation, new frameworks cannot evolve either.”

The idea of the supervisory authority is to allow the new security tokens issued in France to detach from the current European regulations, while remaining under the observation of the French authorities, who will gather important feedback to shape the drafting of legislative material.

However, we will still have to wait for the response of the respective financial authorities of the members of the European Union, who will have to embrace the French regulatory sandbox and launch pilot projects in their own territories.

At the moment there doesn’t seem to be a widespread willingness of the member countries to legalize the security token industry, allowing them to be sold and offered in the form of investment tokens to savers in the EU.

The panorama of security tokens overseas: the case of the SEC against Uniswap

Moving from France and crossing the ocean to the USA territory, we see how the regulators’ approach to security tokens is much stricter.

Just a few days ago, the Securities and Exchange Commission (SEC) issued a Wells notice to the largest decentralized exchange in the sector, namely Uniswap, stating its intention to take legal action against alleged sales of unregistered securities that took place on the platform.

In response, the founder of Uniswap “Hayden Adams” emphasized to his audience on X that the behavior of the US regulatory authority seems focused on hindering the growth of the sector.

First the long legal battles (lost) against Ripple, then the war against centralized exchanges Coinbase, Binance and Gemini, and finally the attack on DEXs like Uniswap.

All this highlights the willingness to rule out a priori the possibility of a common reflection and to undertake a legal path of registration and regulation for those activities that move billions of dollars every day within a cryptographic market.

Adams, in a tweet on X, explained that he feels annoyed and disappointed by the tyranny of the SEC, especially regarding the security token issue, and that he is ready to fight tooth and nail for industry justice.

It is clear that at the moment between France and the United States the winds are blowing in opposite directions: on one hand regulators are trying to find a solution to regulate a niche sector through a dedicated framework that goes beyond current restrictive regulations, on the other hand there seems to be no intention to support the development of this innovative digital frontier.

Meanwhile, the use of digital tokens seems to be more widespread where local regulations allow it, such as in Singapore and Hong Kong, increasingly widening the cryptographic gap between countries proactive to change and more conservative countries.