France’s securities regulator is considering attempting to ban European license “passporting” over concerns related to MiCA regulation enforcement gaps in other EU countries.
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France warned it may try to block cryptocurrency companies operating locally under licenses obtained in other European countries, raising enforcement gap concerns regarding the European Union’s crypto regulatory framework.
France’s securities regulator, the Autorité des Marchés Financiers (AMF), Reuters Monday that it is concerned about potential regulatory enforcement gaps related to Europe’s (MiCA), the world’s first comprehensive crypto regulatory framework.
Concerned that some crypto companies may seek licenses in more lenient EU jurisdictions, the AMF is considering a ban on operating in France under MiCA licenses obtained in other member states.
“We do not exclude the possibility of refusing the EU passport,” Marie-Anne Barbat-Layani, the chair of AMF, told Reuters, adding that it’s “very complex,” akin to an “atomic weapon” for the market.
Crypto companies are looking for a “weak link” in European jurisdictions that will provide a “license with fewer requirements than the others,” she added.
Under MiCA, which took effect for crypto-asset service providers in December 2024, companies authorized in one member state can use this as a “passport” to operate across the 27-nation bloc. France’s warning highlighted fears that uneven standards could undermine the framework.
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France became the third country to call for the Paris-based European Securities and Markets Authority (ESMA) to take over supervision of major crypto companies, according to Reuters, citing a position paper seen by its journalists.
Austria’s Financial Market Authority and Italy’s financial markets regulator, Commissione Nazionale per le Società e la Borsa, have also called for regulatory supervision to be transferred to ESMA.
The three countries also backed revisions to MiCA, including stricter rules for crypto activities outside the EU, stronger cybersecurity oversight and a review of how new token offerings are regulated.
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The debate follows growing criticism of Malta’s crypto licensing regime. In July, ESMA of the Malta Financial Services Authority’s authorization of a crypto service provider, finding that the regulator only “partially met expectations.”
After the review, the ESMA’s ad hoc Peer Review Committee (PRC) recommended that the MFSA “assess material issues that were pending at the date of the authorization or that have not been adequately considered at the authorization stage.”
Malta’s MFSA “needs to monitor closely the growth in authorization applications” and identify and adjust supervisory practices in a timely manner, the PRC added.
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