The Autorité des Marchés Financiers (AMF) have discovered the project that is worth listing as the safe one. The company with a straightforward name “French ICO” aims to help people fund other projects using tokens.
The token authors were applying for a visa according to the PACTE law. It prescribes ICO founders to send out a document with a detailed description of their ideas. The doc must contain relevant information, statistics, PR information and such. The information should contain no mistakes to allow VC funds and private investors to dive in with a precision eye.
Earlier in 2019, French financial regulators were talking about whitelisting three or five ICO projects. Now, French-ICO is getting their license that allows working till June 1, 2020. And regulators approved only the ICO proposal, not the token issuance itself. Moreover, if the token issuers will have another ICO in plans, they will have to wait for 6 months before conducting the new virtual seed round.
Fines Will Reach French Crypto Companies Who Break Rules
Regulation never comes without hefty penalties. If a French company fails to provide information about itself to the investors, clients or regulators, it can become a subject to fines. However, the regulators will only fill the state budget with the funds confiscated from failed businessmen. They will not repay ICO investors money in case their portfolio fails. Only the traditional investors are receiving reimbursements for losses in France.
The country already showed general recommendations regarding ICO campaigns back in 2018. It has proposed a strict set of rules for people who work on coin offerings. The PACTE set of laws appears to have many legislative frameworks that perfectly fit the cryptocurrency space. According to the rules, financial companies working with stock-like assets should register at AMF and obtain a certificate.
Local Financial Regulators Look into Forex, ICO and Shady Ventures
Back in 2018, AMF has blocked 3 cryptocurrency businesses for shady practices. It also banned 7 Forex-related websites. The AMF is looking into asset managers, funds, mining firms, code developers, custodians, and exchanges. Then, it determines whether a firm is operating in a legal zone, and how to properly regulate its business model.
Per the AMF website:
“To ensure that the intermediary who offers you financial products or services is authorized to operate in France, you can consult the list of authorized investment service providers (https://www.regafi.fr) or the list of authorized intermediaries in the Financial Investment Advisor (CIF) or Participatory Investment Advisor (CIP) category (https://www.orias.fr/search).”
According to AMF analysts, the scammers are migrating from the Forex space to the Cryptoverse.
Back in 2016, the investors sent 3768 requests to the AMF, claiming Forex/Binary Options platform took their money. Among them, there were only 18 cryptocurrency-related cases. However, in 2018 the regulators only received 968 scam allegations from the investors regarding Forex and Binary Options. But they got 2600 claims contained cryptocurrency scam exposals.
Jeff Fawkes is a seasoned investment professional and a crypto analyst covering the blockchain space. He has a dual degree in Business Administration and Creative Writing and is passionate when it comes to how technology impacts our society.