France warned on Monday that it could prevent certain licensed crypto companies in other EU territories from operating within its borders within the framework of an effort to obtain the surveillance of digital assets transferred to the central regulator of the securities of the EU.
The financiers of France Authority of Martes (AMF) said to Reuters It is concerned about the fact that the incoherent application of the EU markets in the regulation of cryptocurrencies (MICA) authorizes cryptographic companies to play regulatory arbitration to obtain a license to operate throughout the block of 27 members.
Passed in 2023 and fully in force in December 2024, Mica is a benchmark as the first complete cryptographic regime in any major jurisdiction. But as with other general EU regulations, it is administered and applied by individual national authorities.
Under the EU single market rules, the authorization to operate in a country serves as a “passport” to access other EU territories. On Monday, the French AMF joined Italy Consob and Austria Financial Markets Authority to ask the European Securities and Markets Authority (ESMA) based in Paris to take the supervision of large cryptography companies, according to a post office seen by Reuters.
The president of the AMF, Marie-Anne Barbat-Layani, told Reuters France could not exclude the dramatic step of refusal to honor EU passports for cryptographic companies.
“We do not exclude the possibility of refusing the EU passport,” said Barbat-Layani. “It is very complex legally and not a very good signal for the single market – it’s a bit like” atomic weapon “… But it is always a possibility that we have in reserve.”
According to the position document of the three regulators, “the first months of the application of the regulation revealed major differences in the way in which the cryptographic markets are supervised by the national authorities.” Direct supervision at the EU level, they said, would better protect investors.
The document has not cited specific examples of inconsistencies in the application. According to Reuters, however, Malta’s financial regulator was exposed to a careful examination earlier this year for his license concession program. An ESMA exam concluded that Malta had not done enough to assess the risk when granting a license to a particular cryptography company that she did not appoint.
Cryptographic companies are currently asking for mica licenses in a transition period. According to Barbat-Layani, however, companies “do their regulatory purchases throughout Europe, trying to find a weak link that will give them a license with fewer requirements than others.”
Luxembourg has so far granted a license to the exchange based in the United States Coinbase, while Malta has approved a license for Gemini, an exchange founded by the Winklevoss brothers.
The head of ESMA, Verena Ross, told Reuters that she would welcome the transfer of surveillance to her agencies, but noted that she was facing the resistance of certain EU countries.
The row in Europe occurs while the pressure for complete regulation of cryptography in the United States struck a hook in the Senate. Last week, a key member of the John Kennedy senatoric banking committee (R-La) said that he was not on board with the plan of his GOP colleagues to advance a cryptographic market structure measure by the end of September, saying to journalists: “I don’t think we are ready. The people I talk about still have many questions. I know that I still have a lot of questions.”
The Democrats of the Committee also called to exploit the brakes on the bill to grant more time to debate.
