French Regulatory Agency Blacklists 15 Cryptocurrency Websitesin News
According to the press release, the companies listed ran afoul of the “Sapin II Law”, stating that:
The announcement further explained:
“The investment proposals highlighting the possibility of financial returns or similar economic effects involve intermediation in miscellaneous assets and are now subject to ex ante control by the AMF. Consequently, no offer can be directly marketed in France without prior allocation by the AMF of a registration number.”
"Companies in France offering the purchase of rights over goods promoting the possibility of a yield or its economic equivalent are subject to the regulation of diverse goods and as such their offer must have a registration number provided by the AMF."Those that made it to the blacklist (which is not exhaustive) are either unaware of their obligations under the law or are ignoring these requirements:
The regulator has noted the cryptocurrency craziness that has been observed over the past few months and which has spurred several online trading platforms to offer binary options, CFDs or Forex contracts with an end-of-day maturity (rolling spot forex), where the underlying is a cryptocurrency. Such contracts allow investors to bet on a cryptocurrency’s rise or fall, without holding the underlying.
The AMF has concluded that a cash-settled cryptocurrency contract may qualify as a derivative, irrespective of the legal qualification of a cryptocurrency. As a result, online platforms which offer cryptocurrency derivatives fall within the scope of MiFID II and must, therefore, comply with the authorization, conduct of business rules, and the EMIR trade reporting obligation to a trade repository.The AMF's statement cautioned investors that "no sales pitch should make one forget that there are no high returns without high risks." Likewise, it advised them to perform due diligence on the investments they're considering and to weigh the criteria used to establish a product's price. The regulator also said that investors should consider the means by which a product can be resold and the deadlines which may correspond to this.
"Don't invest in that which you don't understand," the Authority cautioned.The announcement followed the similar move from the French government last year. In December, the governor of the Bank of France issued a warning that claimed Bitcoin is merely a speculative asset, and that it is neither a currency or a digital currency. Jean-Pierre Landau, head of a French-based task force, called Bitcoin the “tulips of modern times”. Whilst the French are using existing regulations to police the exploding cryptocurrency space, the EU has recently declared that they will create specific legislation themselves addressing digital currencies. Last month they stated that regulation needs to happen at the global level but that they would take on the task themselves if such a global response was not forthcoming. The EU Financial Chief, Valdis Dombrovskis said late last month:
“We do not exclude the possibility to move ahead [by regulating cryptocurrencies] at the EU level if we see, for example, risks emerging but no clear international response emerging.”
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