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Financial authorities in France published new rules to guide the licensing of digital asset service providers. The publication also includes specific guidelines to be followed by firms interesting in applying for the license.
According to the publication, the Autorité des Marchés Financiers (AMF), made these rules to expand on the PACTE law. The PACTE law, which initially went into effect back in May, went down in history as one of the foremost comprehensive legal frameworks to guide the crypto sector, in all of Europe.
The new AMF laws have a few mandatory points that interested applicants must meet. The DASP must have a two-year business plan, with specific details on how the business will be run. The provider must also have a full list of assets that they will cover, as well as a detailed organizational chart. Other details include specific activity on the course of their run, regarding the geographic location and many more.
Perhaps the most important requirement expected of the DASP is a compulsory plan for insurance/indemnity. As a way to protect their project and their many investors and customers, DASPs must also have a sizeable funds reserve.
There are also regulations regarding money laundering that every DASP must comply with. According to the AMF:
“If you provide services of digital asset custody and/or buying or selling digital assets for legal tender in France, you must register with the AMF. To do so, you must have an establishment in France. The registration procedure is mandatory. The AMF will check that you comply with the regulations on Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT.)”
The AMF expects digital asset providers in France to put certain cybersecurity measures in place. This will largely reduce the risk of a hack and several other threats. The DASP must also have relevant and up-to-date infrastructure that will help fend off or manage any threats. It should also be able to detect identity theft so users cannot assume another’s profile.
The digital asset providers must employ experienced IT personnel and also have top-notch hardware and software as well. These systems are to function autonomously enough to detect irregularities even without human interference. There should also be a laid down procedure to handle customer complains if and when they do happen.
As part of its functions as a regulatory watchdog, the AMF has also warned the public about several suspicious websites. Along with the Autorité de Contrôle Prudentiel et de Résolution (ACPR), the warning says that these websites advertise investment opportunities for foreign exchange and digital assets. The AMF assures the general public that it will regularly update its website blacklist, to guide unsuspecting investors. The warning also highlights six new unauthorized websites that advertise forex and crypto earnings respectively.
As Simmons & Simmons law firm partner Emilien Bernard-Alzias put it:
“The AMF is trying to take crypto firms by the hand to help them comply.”
The AMF also recently authorized the country’s first ICO.