The AMF (Autorité des Marchés Financiers) financial regulator of France has announced via its official website, that the first-ever initial coin offering, commonly known as ICO, would be granted what they call a ‘visa’ for token issuers who request an AMF approval, in accordance with the French Pact Law.
According to AMF, the optional visa, which was previously introduced by the PACTE law is meant for startups who would seek fundraising via crypto means. At the moment only public offerings of utility tokens, which are not considered as financial instruments, would be eligible to apply for the visa.
The domestic startup who applied first and managed to get AMF’s approval is a company called French ICO, which aims to develop a platform to help other startups in raising funds in cryptocurrency, analogous to a crypto-Kickstarter.
The fist approval is granted until the 1st of June 2020, most likely to see how this evolves, as neither the AMF nor other French financial regulators had previously tackled with ICOs under the legal umbrella.
Furthermore, the AMF has now a special section on its portal that shall be hosting a detailed list of ‘whitelisted’ initial coin offerings that fulfill the optional ‘visa’ requirements, and therefore managed to get an AMF approval.
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AMF’s requirements for the ‘optional visa’
Similar to US, Asian, and other EU country members’ legislative approaches when it comes to ICOs, the French regulator would require some basic understanding of the team behind each project, its legal structure, as well as other ‘minimum guarantees’ in order to ensure investors’ protection. Some of the revealed requirements are:
-The company/issuer of tokens shall be incorporated as a legal entity either established or registered in France
Documents regarding the company’s legal status shall be presented and be in accordance with AMF’s General Regulation and Instruction DOC-2019-06.
-The company is responsible to provide monitoring capability and detailed information about the digital assets raised by the respective ICO, as well as ensure that all funds are ‘safu’ to ensure investors’ protection.
-Last, it is mandatory for the company/issuer to comply with the local and European anti-money laundering and terrorist financing acts on a clear legal level.
The idea behind AMFs ‘option visa’
The AMF makes clear that applying for and/or owning a visa does not guarantee the succession of an ICO, but it is rather a barrier to ensure all necessary measures to operate legally were taken under consideration.
AMF will also judge a startup that seeks to get funding through cryptocurrencies based on the maturity of the white paper, as well as its ability to be understood by all kinds of investors.
This is something to keep in mind if you’re thinking of launching an ICO in French territory, as most white papers are currently written in a language understood only by investors who have at least a basic understanding of how blockchain technology works.
In addition, AMF says that the agency won’t be evaluating the technical aspects of an ICO, such as the smart-contract(s) involved in the offering, technical characteristics, and tokenomics, citing that this is something each investor should evaluate accordingly.
What AMF can do tho is to require from each ICO to include s section of ‘risk factors’ in the documents provided to the financier.
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Conclusion
The AMF made clear that the visa is optional, and ICOs without it could still be legitimate, even without the requirements of the AMF, which are essentially a sort of insurance policy to protect French investors.
However, ICOs not registered with the AMF will not be eligible for solicitation, patronage and sponsorship activities organized and/or promoted by AMF’s gov-backed network. That sounds like Google, doesn’t it?
So, after all we’ve seen this year, is this really a regulatory breakthrough of some kind or it’s just France’s way to say “Hey we’re also advancing in blockchain” to the rest of the world, amid growing players such as China, Russia, Switzerland, and Germany some of who already plan on their own national-scale digital currencies, while ICOs are a common thing of the past for these countries.
Resources
https://news.cryptos.com/french-financial-watchdog-amf-approves-an-ico-for-the-first-time/