Unlike its heavyweight counterparts such as China, Russia or even the US, the French government seems to be moving towards regulating ICO’s. The French Treasury acknowledged the risk related to ICO’s but argues that this situation justifies the need for a regulatory framework which can balance innovation and toxic investments.
French discuss ICO’s as part of their annual report in parliament
When Robert Ophèle, President of the Autorité des Marchés Financier (AMF), presented the 2017 AMF annual report to the Finance Committee of the National Assembly last, he took the opportunity to address a wide range of topics including the PACT Act and ICO’s. The AMF has announced a priority for 2018 too;
“… continue to reflect on changes in the regulatory framework in the face of new offers, in particular, the Initial Coin Offerings (ICO), and to promote at European level the French regulator’s approach to innovation.”
According to the AMF Annual Report, the agency has taken “thorough” work on blockchain and ICOs;
” … This work – which resulted, in particular, in a public consultation of the AMF at the end of 2017 on the different management options for ICOs – aims to change the French regulatory framework and to feed European and international working groups on these subjects.”
“In parallel, considering that certain forms of ICO could in the future constitute an alternative mode of financing for a segment of the economy in connection with blockchain technology, the AMF has launched a program of support and research of ICOs. Called UNICORN (Universal Node to ICO’s Research & Network), this program aims to provide project owners with a framework for developing their operations and to ensure the protection of the players and investors wishing to participate.”
“The AMF has also set itself the goal of encouraging academic research on this subject. At the same time, in collaboration with the ACPR, it has also carried out awareness-raising campaigns to identify the risks associated with this type of investment or investments in bitcoins for unsuspecting customers.”
French annual report affirming ICO’s consultation paper responses
The consultation regarding regulating ICO’s was launched by the AMF last year in Oct 2017 had cleared the agenda of this French government which had publicly stated its interest in becoming an ICO jurisdiction of preference. In March, a report in the French media declared that France seeks to become the “la Capitale des ICO.”
The consultation paper did aim to bring more clarity over the way France can better regulate ICOs. The AMF lined up three options in the consultation paper. First, the regulator suggested producing some best practices for market players to comply with. Second, the AMF proposed to extend the scope of the existing regulation to treat ICOs as public offerings of securities. Third, the AMF proposed to develop a specific and tailored regulatory model with the launch of a license.
The AMF received 82 responses in total. The majority of respondents opted for a specific and tailored regulatory framework and for this new regulation to be made optional.
Respondents unanimously considered that an information document is necessary to inform buyers of tokens and that it should include, at a minimum, information on: The project related to the ICO and its advancement; The rights conferred by the tokens and the accounting treatment of funds raised during the ICO.
For almost all respondents, this document also meant that it should allow for the identification of the legal entity responsible for the offer, its managers and founders, and their competences. Moreover, it could be the subject of approval granted by the AMF or a special-purpose institution.
The French are moving in the direction that may make it the global capital of ICO’s or as the French say “la Capitale des ICO”. If French is able to regulate this market of ICO’s, it could lead to an example for the rest of the world.
Will the next token projects around the world look to Paris for their next ICO? DO let us know your views on the same.