French finance minister Bruno Le Maire passes progressive ICO legislation
French finance minister Bruno Le Maire after passing new legislation relating to ICOs
Img via Twitter
The European Union is rising as a significant alternative to the US for ICOs, with France as the latest to pass new progressive legislation.Tweet this
This week the French parliament passed a new regulatory framework relating to Initial Coin Offerings (ICOs), making them the first national legislative body to pass a law on ICOs.
French finance minister Bruno Le Maire announced the adoption of Article 26 via Twitter, which authorizes the Autorité des marchés financiers (AMF) to issue visas to actors who wish to issue tokens intended for the financing of a project or an activity through an ICO.
“A legal framework for ICOs is created. The AMF will be able to issue a visa to players respecting the protection criteria of savers. This legal framework will attract innovators from around the world.”
A rough translation of Article 26 reads: “Article 26 relates to the creation of a French system of offers of tokens. The ‘Initial Coin Offering’ (‘Initial Token Offering’), ie the fundraising via a shared recording device (in particular by means of the so-called technology ‘blockchain’ or ‘chain of blocks’) via the issuance of digital ‘tokens’, have developed dramatically during the year 2017.
This dynamic growth, reinforced in the first months of 2018, reflects the attraction of this new mode of financing and investment, especially within the blockchain ecosystem but, more broadly, for innovative companies wishing to attract new categories of investors or customers, in new ways.
These operations, however, for the moment, escape a clear legal framework, insofar as, under French law and European law, the ‘tokens’ thus issued can be legally qualified in different ways according to their specific characteristics. In particular, most of these tokens do not meet the definition elements of financial securities.
This situation has the advantage of giving free rein to innovation. However, it has the disadvantage of putting on the same level any type of issuer and project, without providing the subscribers of tokens sufficient means to distinguish serious offers from abusive ones, and the actors who implement procedures in terms of information, identification and knowledge of the customer, of those who do not respect any rule.
In anticipation of European and international rules, necessary on these transnational issues by nature, it seems desirable, in order to better protect the buyers of tokens and the carriers of ‘legitimate’ projects, to allow the AMF to issue a visa to stakeholders who wish to issue tokens intended in particular for the French market for the financing of a project or an activity, provided that they respect certain rules of a nature to avoid obvious abuses and to inform and protect the investor.
The AMF would be given the task of examining the documents prepared by token issuers upstream of their offer (‘white paper’). It may also require issuers to acquire the status of a legal person established or registered in France, set up a mechanism for sequestrating the funds raised, or any tool having [an] equivalent effect, and a device for identifying and customer knowledge.
The actors thus labelled would appear on a ‘white list’, on which the AMF would communicate to the general public, which would identify the actors who respect these rules and provide them with an important pledge of respectability with subscribers. Tokens with the characteristics of a financial security would nevertheless remain subject to the regime of the offer to the public of financial securities.”
Additionally, Trustnodes reported that while the visa is optional, “there’s a huge carrot to get the license as it effectively guarantees a bank account.”
This enables France to provide an alternative to the strict and highly criticized framework of the US Securities and Exchange Commission and enables crypto business visionaries a way to simply take their business elsewhere.
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