Recently, Belgian think tank Bruegel released a report calling for unified legislation on cryptocurrencies and blockchain in the EU, but France has taken the lead and introduced its own regulatory framework for ICOs.
Yesterday, the Minister of Economy and Finance of France, Bruno Le Maire, announced that the legal ICO framework had just been accepted. The framework will provide safeguards and guarantees to investors.
✅Article 26 adopté en commission #PACTE !
➡️Un cadre juridique des #ICO est créé. L’@AMF_actu pourra délivrer un visa aux acteurs respectant des critères de protection des épargnants
➡️Ce cadre juridique va attirer les innovateurs du monde entier #blockchain #DirectAN
— Bruno Le Maire (@BrunoLeMaire) September 12, 2018
Accepting an article of the Business Growth and Transformation bill (PACTE) dedicated to Initial Coin Offerings (ICO) will allow French financial authorities, the Authorité des Marchés Financiers (AMF), to approve and issue permits to companies wanting to use ICOs as a method of raising capital. Le Maire hopes that the current legal framework for ICOs in France will attract investors from every corner of the world. He said:
“A legal framework of ICOs is created. The AMF will be able to issue a visa to the actors respecting criteria of protection of the savers This legal framework will attract the innovators of the whole world.”
The ICO framework was proposed back in March. Bruno Le Maire, a French politician, asked former central bank official Jean-Pierre Landau to draft a proposal for a legislative framework on cryptocurrencies, and wrote in his article:
“France has every interest in becoming the first major financial centre to propose an ad hoc legislative framework that will allow companies are initiating an ICO to demonstrate their seriousness to potential investors”.
Under the new legislation, companies seeking to launch an ICO may apply for the visa by submitting their whitepaper to French authorities for review. The whitepaper must include specific details and guarantees for investors in order to be granted a visa.
These details include a description of the project related to the ICO and its roadmap, the rights conferred by the token, the legislative court in the case of disputes, and the economic purpose and use of funds collected during the ICO. The whitepaper would allow potential investors to undertake full due diligence before investing.
Pierre Noizat, the CEO of Blockchain.io, a new French cryptocurrency exchange, commented on the initiative:
“The French government is not hiding its ambition to make France an ICO capital, as they do not want to miss out on the blockchain revolution. They are regularly speaking with French blockchain and crypto-entrepreneurs in France to get a better grasp on the market, to understand its problems, and to regulate the market accordingly.”
France’s President Emmanuel Macron has historically been bullish on emerging innovative technologies. Last year, he proposed to convert France into a “startup nation.” Accepting the new ICO framework will make France a new ICO hub In Europe.
All the countries worldwide are either developing legal frameworks to govern ICOs, or are issuing guidelines on how to avoid falling foul of securities rules. For example, in August, the Philippine SEC introduced the draft rules on how companies can fundraise via ICO whereas all token were defined as securities by default.
In contrast, the Australian Securities and Investments Commission believes that cryptocurrencies and crypto-related activities including ICOs are potential threats for traditional financial markets, that’s why Australia developed new rules for ICOs and cryptos, and thise rules are more severe than they used to be.