French Regulator and Crypto

This year comes to an end and let’s have a look at how the crypto market changed in 2019. One of the debated issues is the crypto regulations around the world.

Last week, the Financial Markets Authority, which is the financial regulator in France, released the rules regarding the licensing of crypto companies. Furthermore, the following day on December 26, the regulator also released the guidelines about this process.

The rules and guidelines are based on France’s PACTE law.

It is worth mentioning, that France was one of the first countries in Europe to approve the legislative packages. In 2019, the country approved PACTE law.

Regulator asked each digital asset service providers (DASP) to provide a two-year business plan. Also, they must send a list of digital assets the firm is going to service. As part of the application process, the company must provide its organizational chart and other documents.

Crypto regulations in 2019

Crypto companies are required to have professional indemnity insurance or a minimum amount of reserve funds. Also, 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 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. However, 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.

Last but not least, companies are responsible for the cybersecurity of digital assets. As a result, companies should provide a detailed cybersecurity program. Also, the cybersecurity program should comply with Europe’s general data protection regulation.