French financial regulators have joined those in neighbouring Belgium in releasing a “blacklist” of digital currency websites. According to them, these sites have been pushing investments on the public in a way that is banned under French and European law.
French Regulators Crackdown on Illegal Financial Products
The list comprises of 15 websites. These entities are either deliberately flouting French and European law or are unaware of regulations under the Sapin II law and the MiFID.
The AMF, France’s financial markets regulator have put together the following list of those websites that they feel are illegally targeting domestic investors. According to Finance Feeds, the AMF are careful to point out that the below list is not exhaustive:
The issue is that under the Sapin II law in France, digital advertising for potentially harmful Contract For Difference (CFD) products and certain binary options is strictly forbidden. The AMF has concluded, based on their February classification of cryptocurrencies and financial products relating to them, that they do indeed fall under the remit of Sapin II law.
In addition, the French regulator also commented on a slew of online trading platforms offering various financial products where the underlying asset is cryptocurrency. These products allow exposure to cryptocurrency’s volatility without forcing investors to get to grips with actually handling digital currency themselves.
The AMF believes that cash-settled contracts such as these should be considered as derivatives. Therefore, they fall under the legal requirements of the EU’s Markets in Financial Instruments Directive (MiFID). This legislation sets various rules that these products and those offering them must comply with. Such regulations are intended to make European markets safer and more transparent following the 2008 financial crisis.
The French blacklist follows that which was published in Belgium just last month. There, the Financial Services and Markets Authority (FSMA) also named a group of websites deemed to be illegally going after potential investors in Belgium.
Whilst the French are using existing regulations to police the exploding cryptocurrency space, the EU has recently declared that they will create specific legislation themselves addressing digital currencies. Last month they stated that regulation needs to happen at the global level but that they would take on the task themselves if such a global response was not forthcoming. The EU Financial Chief, Valdis Dombrovskis said late last month:
“We do not exclude the possibility to move ahead [by regulating cryptocurrencies] at the EU level if we see, for example, risks emerging but no clear international response emerging.”