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Mandatory PSAN accreditation: industry concerns appear to be heard

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While part of the French cryptocurrency ecosystem is worried about a potential mandatory PSAN accreditation as early as October 2023, MPs Daniel Labaronne and Eric Bothorel have each proposed an amendment that seems to satisfy the industry’s expectations. We take a look at the main points of these proposals, which will be put to a decisive vote on Tuesday 24 January

PSANs heard by politicians

Mandatory PSAN approval: this idea has been worrying digital asset service providers since Senator Hervé Maurey tabled an amendment to this effect last month.

It is a regulatory response to FTX’s fraudulent actions, but unfortunately it is not adapted to the context. Worse still, it could deal a fatal blow to a French industry that claims to be responsible, to the benefit of foreign players who sometimes play around with local regulations.

As a reminder, this amendment aims to accelerate the regulatory timetable on MiCA regulations, by making PSAN approval mandatory from October 2023. This is an extremely short timeframe, especially since for the time being, no company has managed to get approved, notably because of the mandatory liability insurance, which is not currently offered for cryptocurrency-related companies.

The various problems of such a prospect were in fact detailed by our journalist Valentin Demé, Faustine Fleuret, president of ADAN, as well as Owen Simonin (aka Hasheur), CEO of Meria:

This Friday, the concerns of the French ecosystem seem to have been heard. Indeed, while Senator Hervé Maurey’s amendment will be voted in the National Assembly on Tuesday 24 January, MPs Daniel Labaronne and Éric Bothorel have each proposed an amendment that reflects the reality of the field much more closely:

Daniel Laboronne, for example, reminds us that overly restrictive regulations in France will not protect investors from less scrupulous players. This is because, in any case, other EU firms will benefit from the tolerance period provided for by MiCA, in terms of the equivalent of the authorisation provided for in the text:

“If the regulation is too restrictive in France, it will not protect investors.
If the aim is to prevent too many service providers from registering in France opportunistically in order to benefit from this tolerance period regime, it should be recalled that it would be sufficient for providers to register in another Member State to benefit from the same tolerance period. “

If Mr Maurey’s amendment were to be adopted by the National Assembly, France would lose out, and French investors could still turn to foreign players.

Key points of these amendments

In their proposals, MEPs Daniel Labaronne and Eric Bothorel have heard the arguments of French players about the irrelevance of mandatory PSAN approval and are proposing a more coherent version of these regulatory expectations.

This does not absolve French companies from their obligations, and requirements are made to protect investors. These include the following:

  • Clear communication on potential conflicts of interest;
  • Segregation of client funds from company funds;
  • A clear prohibition on using client funds for one’s own account;
  • Strengthened security measures.

Faustine Fleuret, President of ADAN, sees these proposals as relevant to both compliance and innovation:

“These proposals are a good start to the new era of financial services.
These proposals are a step in the right direction, both to effectively protect the investor and to preserve the dynamics of innovation and business creation in France. We hope that the parliamentary debates will allow this pragmatic and proportionate solution to be definitively implemented. These amendments send a positive message, but also a demanding one for the French sector, which is moving towards the European standard at a pace that is sustainable for its development. “

In addition, she reminds us that not everything is decided yet, and that the vote to come next Tuesday will be decisive:

Adan and the industry very much welcome the pragmatic and proportionate approach shown by these proposals. Nevertheless, we must remain cautious and await the results of the vote that will follow the debates in the Public Session of the National Assembly on Tuesday evening. Furthermore, the government’s position is not known at this stage and could influence the deliberations in Parliament. “

While these two proposals are thus in the direction of the French cryptocurrency ecosystem, they should not be taken for granted, and the results of the January 24 vote should therefore be followed carefully.

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