The Financial Markets Authority of France (MFA) has published the new rules on the authorization of digital asset service providers (DASP). The institution also presented a guide for companies wishing to apply for an operating license in this country.
The rules and guidelines are based on the PACTE law, which was approved in May 2019.
According to the new rules, interested companies must send the AMF a two-year business plan and a list of digital assets to manage. Also, it must communicate in which jurisdictions it is going to activate and transmit the organization chart, among others.
In order to obtain a license, the DASPs are required to have a fund insurance system or a minimum amount of reserve funds. Requirements include the hiring of an efficient senior manager, IT systems, an internal control system, a demand management procedure, a conflict prevention system and procedures for preventing money laundering.
Elimination of suspicions
The PACTE license is not obligatory, but it offers the companies that obtain more legal certainty. According to official statements, the purpose of registration with the MFA is to prevent money laundering suspicions.
The French regulatory authority has also issued specific rules for different categories of activities. There is, for example, a guide for those who want to provide cryptocurrency custody, exchange or cryptocurrency broker-dealers.
Blockchain security risks
The French government, with the help of the MFA, has defined the custody service of cryptocurrencies as “controlling the means of access” (cryptographic keys) for the digital assets of a third party. The new rules for authorized custodians include multi-validation of customer transactions and compensation of customers if the owner cannot restore control over the respective assets.
In the published guide, the MFA notes the security risks posed by the blockchain and asks the crypto companies to provide the regulator with a detailed cybersecurity program. It must mitigate risks and comply with the general European data protection regulation. Companies that provide crypto services are responsible for the cyber security of the services they provide and will be subject to periodic technical audits.
“AMF is trying to help crypto companies comply,”
explained French lawyer Bernard-Alzias.
“For other financial services providers there are requirements for a strong IT system, and the other AMF guides do not have as many details as for the crypto companies … Basically, AMF explains from the beginning what they have to do, and this is new for us in France. “
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