France’s drive to become European crypto hub blasted over regulation holes
France’s sudden interest in creating a European hub for the cryptocurrency industry has been called into question over its approach to regulation.
Regulators in Paris last week welcomed cryptocurrency exchange Binance with open arms after being granted a Digital Asset Service Provider (DASP) registration. Binance then announced it would be using France as its European HQ.
An attempt to set up a similar base in London failed last year after being dismissed by the UK’s Financial Conduct Authority (FCA).
Zoltan Kormanyos, head of legal at comparison website BrokerChooser is urging crypto users to handle Binance’s latest announcement about its Autorité des marchés financiers (AMF) registration with caution.
“The French crypto regime is not tight enough in the sense that it does not address crucial regulatory elements such as conduct, prudential, consumer protection, operational and transparency issues,” he said.
“It does basically the same as the FCA’s current registration regime for crypto asset businesses, both of them focusing predominantly on compliance with AML and KYC requirements.”
He adds there is appears to be a difference regarding regulatory attitude as the Financial Conduct Authority seemed to have taken a tougher stance on Binance resulting in the withdrawal of its registration request.
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At the time, the FCA highlighted that “Binance’s UK affiliate had failed to respond to some of its basic queries making it impossible to oversee the group”.
“Whereas in France, it looks like the AMF was satisfied with the answers given by Binance to the same questions,” he explained.
“By way of contrast, the New York State Department of Financial Services’ current ‘Bitlicense regime’ is taking a tougher stance by regulating basic prudential (such as capital requirements), conduct (such as protection of customer assets, advertising and marketing activity and consumer protection etc), operational (such as business continuity, disaster recovery and cyber security) and transparency aspects (such financial and consumer related disclosures) as well.”