AMF, the French financial regulator, has approved the first Initial Coin Offerings (ICOs) in the country. That is coming after the French government created a list of ICO white lists in July this year. The French government has already set out rules regarding the acceptance of ICOs that want to establish in the country. And the AFM financial watchdog will be solely responsible for regulating all crypto-related activities in the country.
French-ICO is a platform developed for funding cryptocurrency projects. The platform has made history by becoming the first French ICO to become white-listed in the country. Already, the AMF website has added the cryptocurrency funding platform to its website, which makes it official. The approval of AFM will remain valid until the subscription period for the ICO ends on the 20th of June, 2020.
To clear any ambiguous interpretation of the approval, the AMF has come out to say it only approved the ICO proposal of the firm but not the token issuer. However, the regulator stressed that any interested issuer is free to apply for a single ICO within six months.
The regulator also mentioned that it is currently accessing the application of about four candidates for the ICOs. After the assessment, AMF will determine whether the applicants have met all the requirements. According to AMF, it’s only after the assessment it would decide to give any of the ICO issuers the approval.
The PACTE law states that token issuers that apply for a visa from AMF should provide necessary documents containing details of the proposed ICO. The regulator stressed that the document and other related documents should provide accurate details about the ICO proposal. It would help investors better understand the details before investing.
The PACTE law covers different measures AFM is using to monitor activities related to cryptocurrencies as well as all active players in the industry.
Currently, the PACTE law requires cryptocurrency custodian providers and exchangers to go through a compulsory AMF registration. After the registration, the AMF will grant the certificate of operation. However, before that, the regulator will make sure the company passes all the requirements.
The AFM stated that it is currently going through the documents of four crypto-related operators. They include asset managers, custodians, and exchange platform. After the assessment, AMF would reserve the right to offer a license or reject the application.
France recently proposed cryptocurrency amendments to protect buyers in the cryptocurrency market effectively. The law was an amendment of the 2018 ICO guidelines for all prospective ICO issuers and other cryptocurrency-related businesses. The law has already taken effect, with the first ICO set to be launched by French-ICO.
AMF will be the regulatory watchdog that oversees the activities of these crypto-players. The regulation stipulates that anyone that fails to comply with the law would be fined heavily. The idea is to protect the interest of the investors over the unscrupulous activities of some crypto-players.
Initially, the PACT law introduced in the country was meant to give companies optional visas to raise funds in crypto-assets. But only public offerings in utility token were qualified for such a visa. And these utility tokens are not classified as financial instruments.
In a recent statement released on the company’s website, the ICO would take effect from March 1 to June 1, next year.
AMF said it gave French ICO the approval because the company made the minimum requirement for any company launching an ICO in France.
However, AMF did not fail to point out that companies must have to abide by the rules to get a chance for approval. It said ICOs with no approval from AMF are considered legal. However, ICO operating unlicensed services or those with no visa will not be allowed to seek sponsorship, patronage, or solicitation activities.
In other words, before an applicant would be approved to launch an ICO in the country, they must be licensed as service providers and have visas to operate as well.
The ICO regime followed the introduction of the French PACTE law in France. The PACTE law simplified the general requirements for token issuers to request for the approval of ICO visas from AMF.
For any token issuer to be considered for approval, the applicant must provide the necessary documents that are in line with the regulation of the PACTE laws regarding the ICO issue. They must provide a framework where the company would be able to monitor and safeguard the assets raised via the ICO.
Also, the applying company must show their willingness to comply with existing terrorist financing and anti-money laundering laws. According to PACTE, it’s only after these regulations are met before the applicants would be considered for ICO approval.
In a press release from AMF, it’s optional to seek permission to float an ICO. According to them, ICOs that don’t seek the necessary approval may not be considered illegal, and the approval is not granted to the issuer. The approval of an ICO does not necessarily mean the ICO or issuer has been endorsed.
ICOs were booming over the past several years, as companies raised billions of dollars in the process. However, when regulators clamped down on their activities, they quickly disappeared as they came. But the recent approval of French ICO could be an indication that the stringent regulatory rules have been relaxed. It could stir the interest of other companies that want to raise capital through ICO.
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