The French financial regulators have expanded
Cryptocurrencies have seen its share of fraudulent activities, which is why agencies have been taking action on websites that claim to offer crypto investment opportunities. French agencies have added 21 new websites that have offered investors token sales and digital asset trading.
The French financial market authority called L’Autorité des Marchés Financiers (AMF), has released an update on services that blacklist businesses that expose investors to fraudulent schemes. A lot of the new 21 names belong to grey sections of the crypto industry while offering investment opportunities to individuals that are interested in Initial Coin Offerings (ICOs), or mining projects and even cryptocurrency trading. These kinds of entities can be spotted if they have no authority to operate in a particular sector. The business may also neglect to provide accurate information to its investors. The AMF has said that this list is regularly updated, however, bad actors may appear at any time.
The French authorities blacklisted approximately 15 online platforms back in March that were suspicious of similar fraudulent activities. The AMF stated later in July that the digital assets investment may be at risk to French citizens from scammers. The regulatory bodies have included a warning to all financial investor to analyze and estimate risk assessment more frequently when going in the industry. The agency thinks that because of the lack of reliable data that is it hard for them to single out the risks associated with these types of financial activities.
The French regulators think that these kinds of problems are even more complicated because of the fact that cryptocurrencies and crypto related products and services are still not yet fully covered by the legal system in the country’s legislation. This technology is neither considered currencies or as financial instruments. It is also unclear which particular state or institution bears the responsibility and is competent enough to perform the controls needed for oversight and functions of this technology.
However, the AMF has suggested that crypto derivatives may fall under the rules that are applicable to financial instruments under the Monetary and financial code of France. These same laws are applicable to acts of approval of entities that are in the business of selling products and services, as well as regulations that govern the operations provided.
Making the investment in ICO’s safer for investors
Initial coin offerings or digital tokens are based on the future use of service offered by the issuer according to French authorities. These tokens also represent the success of the respective project. In the past years, tokens were not recognized as financial instruments, this is way crowdfunding through ICOs has remained outside the scope of French regulatory frameworks.
Lawmakers in Paris have adopted new legislation that has introduced strict guidelines that is part of a legal framework designed to regulate the sales of tokens in the cryptocurrency industry. The law has granted AMF the power to licenses entities that are on schedule to conduct ICOs based on certain conditions like guaranteeing individuals on selected projects. Information will also be imperative in order for investors to engage in a specific ICO project.
The French financial market authorities consider the lack of direct regulation needs to be implemented because of the inherent risk of all Initial Coin Offerings. This has become a part of president Emmanuel Macron’s rules that plans on improving all businesses in the country. This must have the ability to cut taxes from crypto profits, these kinds of rules can turn France into another European jurisdiction that is in favor of a crypto-friendly economy.
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