France could be set for tighter crypto rules as a French Senator has proposed to tighten crypto regulations. The senator’s proposal would require businesses to obtain a license from the French regulator.
As the collapse of FTX rocks the cryptocurrency industry, a French senator has advocated for tighter rules. The decision also comes as the European Union’s Markets in Crypto Assets (MiCA) comes closer to implementation.
In an article published on Thursday, The Financial Times stated that France is under increasing pressure to close regulatory loopholes related to cryptocurrencies.
France now provides a window with less governmental oversight to entice cryptocurrency startups. Senator from the finance commission Hervé Maurey is apparently planning to change the clause. This includes removing the authorization for registered bitcoin businesses to operate domestically until 2026 without a complete regulatory license.
The report is released at a time when the European Union is getting ready to fully implement the Markets in Crypto-Assets (MiCA) regulation in 2024. In France, Digital Asset Service Providers (DASPs) are required to register and comply with AML/CFT regulations. The registration allegedly does not call for a license, though. According to the research, there are 50 registered firms operating illegally in France.
France’s position as one of the top twenty crypto economies and one of the most “business-friendly” countries is one of the causes behind this. Notably, SG Forge, one of the oldest banks in the country, received approval from the French financial authority to provide bitcoin services back in October. This year, Binance was also successful in registering in France.
FTX Collapse Serving As A Catalyst For Tighter Crypto Regulations
Several other firms that had direct or indirect exposure to the exchange were devastated by FTX’s insolvency. Investor losses of billions of dollars have also prompted authorities to tighten regulations.
According to Maurey, the FTX collapse was an explosion [that] led to a time of awakening and understanding. Many players in the French system began to believe that tighter supervision was necessary as a result. The senator’s plan, if approved, would mandate that companies apply for licenses with the French regulator, the Autorité des Marchés Financiers (AMF), starting in October 2023.
This week, it was also revealed that Hong Kong and Canada will strengthen their crypto regulations to stop future events similar to FTX. Senators in the US are also pleading with Congress to regulate cryptocurrencies.