Is the French cryptocurrency sector in danger? With the amendment proposed by Senator Hervé Maurey, French companies will soon be forced to have PSAN approval, which can have dramatic consequences for all companies. We take stock of the situation.
Les entreprises crypto françaises devront-elles bientôt cesser leurs activités ?
Companies in the crosshairs of an elected official
Since the fall of FTX last November, representatives of French political life debate about the next regulation to bring to the cryptocurrency sector. Some elected officials want to impose strict legislation for companies in the French ecosystem.
Hervé Maurey, senator for Eure, recently proposed an amendment to a legislative text of the monetary and financial code. In other words, the senator tries to modify the rules of the PACTE lawpassed in 2019, regulating the industry regarding digital asset service providers (DASPs).
As a reminder, the PSAN is a regulatory status issued by the Autorité des marchés financiers (AMF) to regulate companies in the crypto sector in France so that they can carry out their activities in the territory. This device is divided into two categories:
registrations, mandatory to start an activity; and approvals, optional.
👉 To understand everything about the PSAN registration and its fields of application
If registration is easier to obtain, it is because the documents requested for its allocation are not based on the characteristics of the company, but rather on the skills of individuals to carry out their activity in any case. There are nevertheless provisions to fight in particular against money laundering and the financing of terrorism (LCB-FT) as specified on the AMF website regarding the PSAN registration:
After submitting your file, one or more meetings / conference calls relating to the presentation of your project and your LCB-FT system are organized by the AMF and the ACPR.
On the contrary, approval is based on the company’s financial information. As a result, it is more complicated to obtain since it requires both more in-depth analyzes from the AMF and more complex procedures for the company, in particular insurance to cover its funds.
While around sixty French and foreign companies have a PSAN registration, the senator’s argument is that none of them has the optional approval. According to Hervé Maurey, registration is too lax to regulate the sector. He therefore asks for its deletion to replace it with the approval:
“This amendment should make it possible to close the registration procedure and impose that of approval, to avoid any misuse of the regulatory framework. »
At the time of writing, the amendment has been passed by the Senate. This therefore means that all French companies will have to obtain approval before October 1, 2023. Otherwise, these companies will have to cease their activity.
👉 In France, what is the impact of the fall of FTX on the PSANs?
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An amendment that is debating
In the days that follow, many voices are likely to rise in the face of the choice of the senator. While French companies are bearing the full brunt of the fall of FTX, this amendment could significantly slow down the development of the French cryptocurrency sector.
First of all, it is important to remember that accreditation is optional but that companies have already been asking for it for several months. Nevertheless, there are real obstacles to obtaining itand even on the side of the AMF, which does not yet seem structured and ready to correctly issue this approval.
One of the black points of the PSAN accreditation is the mandatory need to have professional liability insurance to secure the company’s funds. While firms in the sector have difficulty in being offered traditional banking services, insurance services categorically shun the sector.
In conclusion, this amendment is debated because companies in the French cryptocurrency sector find themselves up against the wall, faced with centralized financial entities refusing to provide them with services which are now required of them to comply with the laws in force.
👉 To understand: Reread the forum of Faustine Fleuret, president of ADAN
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French actors in danger?
If this approval becomes mandatory, companies in the cryptocurrency industry will have until October 1 to comply. However, under the current conditions, it is impossible to obtain it. As ADAN claims, the necessary staff and resources should first be put in place on the side of the regulators.
As for the risks, they are always the same: by regulating French companies too strictly, they will lack competitiveness and attractiveness in the face of foreign entities that escape French legislation. While this law results from the collapse of FTX, it is the most regulated entities that will pay the high price:
“The recent bankruptcy of FTX has highlighted the risks inherent in any investment in crypto-assets, especially when the company operates outside of any regulation. »
The amendment proposed by the senator was voted on and accepted by the Senate. Thereafter, it will be transmitted to the National Assembly which will have to vote it in turn to validate it. Waiting, companies must make their voices heard by the various elected officials.
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Always enthusiastic about new technologies, I gradually moved closer to Web3-related activities during the year 2021. Over time, I wanted to add my stone to the building. It was then that I became an editor, with the aim of explaining cryptocurrency-related topics to as many people as possible.
Timothy Bourbotte
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