The French government has made new strides in establishing a new regime for crypto assets. The Autorité des marchés financiers (AMF), the country’s financial authority, has published new rules for the licensing of Digital Asset Service Provider (DASP).
Released on December 20, these guidelines are part of the Loi PACTE, a legislative package tailored for the crypto market that was passed earlier this year in May. They also contain further details for the non-mandatory license application and informs about internal cybersecurity practices.
According to the AMF website, an actor may be considered a DASP if it provides at least one of the following services for digital assets:
Services on behalf of third parties, which includes
- custody of digital assets (detaining and managing cryptographic keys on behalf of a client),
- the service of buying or selling digital assets for legal tender,
- the service of trading digital assets for other digital assets,
- the management of digital asset portfolios,
- advice to investors in digital assets, among others.
Registration is mandatory in the case of two activities. If the firm provides services of digital asset custody and, or buys or sells digital assets for legal tender in France. Upon registration, the AMF checks that the firm complies with anti-money laundering and anti-terrorists regulations.
For the DASPs already in existence before December 18, the AMF gave them 12 months to register, after which they need to cease activities if they haven’t received the green light.
The application process
To complete the application process, the AMF requires, among other documents, a two-year business plan, a list of digital assets that the firm will license, and the geographical location the firm will operate.
The authorised DASP must either have professional indemnity insurance or a minimum amount of reserve funds. Also, it must dispose of at least one effective senior manager, sturdy IT systems, claims handling procedure, and an internal control system.
France leading the race for crypto regulations
As reported by CoinDesk, the French government has defined a crypto-asset custody service as “mastering cryptographic keys for a third party’s digital assets”. They are also responsible for the cybersecurity of the services they provide and are subject to obligatory regular technical audits.
This is not the first time that the AMF has made the news this month. On December 18, the cryptocurrency fundraising platform French-ICO was the first successful recipient of the AMF ICO visa.
As reported previously, the financial authority requires companies to apply for a visa to operate, as part of the PACTe law, one of the most comprehensive legal frameworks for cryptocurrencies. The approval enables them to market its (token) sale and engage in promotional activities. However, registration is optional since companies can host unregistered ICOs but aren’t allowed to promote its sale to potential investors.