A group of cryptocurrency firms is close to receiving approvals from France’s authorities, in a move that could accelerate Paris plans to regulate the digital currency scene.
Earlier in April, France enacted the country’s first regulatory framework governing crypto-asset intermediaries. The French parliament passed a bill that allows for cryptocurrencies to be recognized in the country while ensuring the authorities can tax profits generated by the operators and investors in the sector.
“France is a precursor. We will have a legal, tax and regulatory framework. We are in talks with three or four candidates for initial coin offerings (ICOs),” said Anne Marechal, executive director for legal affairs at the Autorité des Marchés Financiers (AMF).
The current laws require cryptocurrency exchanges as well as custodian providers to undergo a mandatory AMF registration and obtain a certification to be granted by the French watchdog. The AMF executive confirmed that the regulator is already involved with other crypto-related operators such as exchange platforms, custodians, and asset managers.
France has previously introduced its own guidelines governing the ICOs and similar token sales earlier in 2018 and then proposed legislative amendments to put cryptocurrency-related entities under the legislative purview of its financial watchdog.
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Rules vary, but all regulators are cracking down
The new framework also comes with hefty fines for those who fail to comply, but will not reimburse investors for their losses as it happens with compensation funds that cover traditional investments.
France wasn’t the first European nation to tax crypto revenues, as Spain also applies taxes to cryptocurrencies transactions and its residents must disclose any profit obtained from these activities.
Although it is hard to generalize the attitude towards cryptocurrency across Europe, some major countries – including in France and Germany – have repeatedly called for more discussions on the topic.
Rules vary wildly by country because of the lack of pan-European legislation. But overall, local regulators across Europe are cracking down on trading venues that lack permission to offer brokerage services.
The European Union has also proposed that cryptocurrency service providers be brought under the scope of its anti-money laundering and countering terrorist financing regulations.