A French financial technology (fintech) company was criticized by local regulators this Monday for trying to sell cryptocurrency through tobacconists. The Autorite des Marches Financiers (AMF) said in a statement that Keplerk would be unlikely to provide customers with significant protections and that it is operating without any regulatory oversight.
Those comments came almost a week after Keplerk announced the launch of its new deal with French tobacconists. Unlike many other European countries, where the number of tobacconists has been shrinking, France still has over 24,000 licensed tobacco shops.
In recent years, these shops have been attempting to diversify the set of products they offer by selling lottery tickets, phone cards and credits for music streaming services. Now, it seems, some of them will be hocking bitcoins.
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A tobacconist that partners with Keplerk will be able to sell bitcoin vouchers to its customers. If a customer buys one of these vouchers, they can redeem it online by gaining access to a wallet owned by Keplerk.
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The fintech company makes money off of any sales a tobacconist makes by charging a commission fee. According to a Reuters report released last Thursday, the company will take seven percent from any transaction made.
To the bitcoin-loving ears of cryptocurrency fanboys, this probably sounds amazing. Not so for French regulatory authorities who tend to follow that old Ronald Reagan dictum; “if it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”
Highlighting the risks involved in trading cryptocurrencies, the AMF said that bitcoin is “not well-suited to [financially] unsophisticated private investors.” It added that bitcoin trading is performed outside the purview of France’s financial regulators.
“PAYSAFEBIT SASU, with capital of 50,000 euros ($57,000), using the trade name KEPLERK, which does not have any authorization or approval by a French or foreign authority, is not likely to provide any [protection] to its customer base,” said the regulator. “The trade name KEPLERK must not be confused with companies approved in France such as Kepler Cheuvreux or Kepler capital markets which have no connection with this activity.”
Though they are yet to regulate them, French authorities do not seem particularly keen on cryptocurrencies. In May of this year, the AMF’s President, Robert Ophele, described them as a “toxic investment product” and implied that they were used by fraudsters to rip people off.