This week France’s financial regulator, Financial Markets Authority, released the rules on Wednesday regarding the licensing of crypto companies. Moreover, the following day regulator also released the guidelines about this process.
The rules and guidelines are based on France’s PACTE law. As a reminder, France was one of the first countries in Europe to approve the legislative packages. In 2019, the country approved PACTE law.
According to the rules, each digital asset service providers (DASP) has to provide a two-year business plan. Also, they have to send a list of digital assets the firm is going to service. As part of the application process, the company has to provide its organizational chart and other documents.
Crypto regulations in France
There are certain requirements for DASP’s when it comes to financial stability. For example, companies are required to have professional indemnity insurance or a minimum amount of reserve funds. Also, crypto companies should have at least one effective senior manager.
Also, an internal control system as well as strong IT systems. However, this is not all the prerequisites. DASP should create claims handling procedure; this way the organization will avoid the conflict of interests. Furthermore, it is the crypto company’s responsibility to prevent money laundering and other illegal activities.
It is important to note that licensing is not mandatory for crypto companies operating in France. According to the French government, any firm dealing with crypto-to-fiat services or vice versa are obliged to register with the financial regulator.
The French regulator also released specific rules for crypto custodians, crypto exchanges, and other crypto-related companies.
Based on the guidelines issued by the financial regulator, crypto companies are responsible for the cybersecurity of digital assets. French regulator asks companies to provide a detailed cybersecurity program. The purpose of this program is to minimize the risks. Also, the cybersecurity program should comply with Europe’s general data protection regulation.
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