According to Cointelegraph, France has issued a warning that it may attempt to block cryptocurrency firms from operating within its borders if they hold licenses obtained in other European countries. This move raises concerns about potential enforcement gaps within the European Union's crypto regulatory framework. The Autorité des Marchés Financiers (AMF), France's securities regulator, expressed apprehension regarding the Markets in Crypto-Assets Regulation (MiCA), the EU's comprehensive crypto regulatory framework. The AMF is particularly worried that some crypto firms might seek licenses in EU jurisdictions with more lenient regulations, potentially undermining the framework's effectiveness. Marie-Anne Barbat-Layani, chair of the AMF, indicated that France might consider refusing the EU passport for such firms, describing the situation as complex and likening it to an 'atomic weapon' for the market. She noted that crypto firms are searching for a 'weak link' in European jurisdictions to obtain licenses with fewer requirements.
Under MiCA, which became effective for crypto-asset service providers in December 2024, companies authorized in one EU member state can use a 'passport' to operate across the 27-nation bloc. France's warning underscores fears that inconsistent standards could weaken the regulatory framework. In a related development, France has joined Austria and Italy in calling for the European Securities and Markets Authority (ESMA) to oversee major crypto firms. This call for action was reported by Reuters, citing a position paper. Austria's Financial Market Authority and Italy's financial markets regulator, Commissione Nazionale per le Società e la Borsa, have also advocated for transferring regulatory supervision to ESMA. The three countries support revisions to MiCA, including stricter rules for crypto activities outside the EU, enhanced cybersecurity oversight, and a review of new token offering regulations.
This debate arises amid increasing criticism of Malta's crypto licensing regime. In July, ESMA conducted a peer review of the Malta Financial Services Authority's (MFSA) authorization of a crypto service provider, concluding that the regulator only 'partially met expectations.' Following the review, ESMA's ad hoc Peer Review Committee (PRC) recommended that the MFSA address material issues pending at the time of authorization or inadequately considered during the authorization stage. The PRC also advised the MFSA to closely monitor the growth in authorization applications and adjust supervisory practices as necessary. This situation highlights the ongoing challenges and discussions surrounding crypto regulation in Europe as countries strive to balance innovation with effective oversight.