TL;DR
- France has proposed holding crypto platforms liable for certain customer losses when they facilitate access to DeFi protocols.
- The proposal includes security audits, vulnerability monitoring, and certification requirements for protocols and smart contracts.
- France also wants to expand ESMA’s authority over major crypto platforms and revise MiCA’s regulatory criteria.
France has proposed amending the European Union’s MiCA regulation to hold crypto platforms liable for certain security incidents involving decentralized finance (DeFi) protocols. The measure would apply to providers that facilitate access to these services without assessing their risks or that ignore known vulnerabilities.
The proposal was jointly submitted by the French Treasury, the Financial Markets Authority (AMF), the Bank of France, and the Prudential Supervision and Resolution Authority (ACPR).
MiCA currently excludes services provided in a fully decentralized manner without intermediaries. French authorities want to establish obligations for regulated platforms that connect their customers to these protocols.
France Calls for Stricter Security Controls on Crypto Platforms
The proposal would require crypto service providers to assess DeFi protocols before offering them to users and monitor potential vulnerabilities and suspicious activity.
It also includes security certifications for protocols and smart contracts, along with legal liability for certain incidents affecting customers.
The requirements would apply in full to platforms classified as significant, while smaller providers would face obligations proportionate to their size.
Companies could continue offering access to uncertified protocols, provided they conduct their own assessments and explicitly disclose the risks.
France rejected mandatory certification requirements for all self-custodial wallet developers. Instead, it proposed voluntary certification for advanced wallets that integrate DeFi services.
France Seeks to Expand ESMA Oversight Under MiCA
The authorities also supported giving the European Securities and Markets Authority (ESMA) direct supervisory authority over major crypto platforms, which are currently overseen by national regulators.
They proposed lowering MiCA’s threshold of 15 million daily active users in the European Union for identifying significant service providers.
They also suggested considering assets under custody, business risks, and the complexity of corporate groups.
France also called for a review of the rules governing asset-referenced tokens (ARTs), a category that has yet to receive any authorizations under MiCA, and for changes to the e-money token framework to include stablecoins pegged to multiple currencies.
The European Commission will use the consultation responses to prepare a report for EU lawmakers, scheduled for submission by June 30, 2027.
