France’s top financial watchdog — the Autorite des Marches Financiers (AMF) — just announced its opinion that “cash-settled cryptocurrency contracts” are officially derivatives. As such, the formal classification mandates these crypto products are subject to France’s strict derivatives laws and an advertising ban.
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Crypto Derivatives Come Under Fire
As part of a broader advertising ban targeting forex and binary options products, France’s AMF has clarified that a “cash-settled cryptocurrency contract may qualify as a derivative,” and as such, these kinds of products will also be targeted.
Now, advertisements pertaining to forex contracts that involve speculation on cryptocurrency prices will be expressly forbidden in France. The decision has no precedent in Europe and necessitates the crypto products comply with a slew of laws.
In its declaration, the AMF noted:
“Online platforms which offer cryptocurrency derivatives fall within the scope of MiFID 2 and must therefore comply with the authorisation, conduct of business rules, and the EMIR trade reporting obligation to a trade repository.
Above all, these products are subject to the provisions of the Sapin 2 law, and notably the ban of advertisements for certain financial contracts.”
Not Being Singled Out
France’s move against crypto derivatives is not only national — it falls within the umbrella of a larger European Union campaign to clamp down on the riskiness of European derivatives markets in general.
For instance, the European Securities and Markets Authority is also reportedly considering mandating leverage caps on all speculative contracts maintained within the EU.
Oftentimes, France just likes to move at the regulatory vanguard compared to its European peers — it comes as no surprise that it’s moving against crypto derivatives ads first.
What’s your take? Do you think France will continue to be hawkish when it comes to the cryptocurrency craze? Sound off in the comments below.
Images via Social Matter, Finance Magnates