New constraints on the crypto-asset sector, an ill-advised overreaction
- Adan takes note of the French Government’s ordinance tightening the anti-money laundering and anti-terrorist financing measures for crypto-assets service providers and condemns both the content and the form of this text.
- We regret that our suggestions to the Government seeking compromise have not been heard.
- The Association calls for a change of approach on the part of the Government towards more tangible support of the crypto-asset industry and its development, which this year confirmed its strategic importance at the global level.
The Association for the Development of Crypto Assets (Adan) takes note of the publication, in today’s Official Journal, of an order aimed at tightening anti-money laundering and anti-terrorist financing measures applicable to digital asset service providers. We regret both the form and the substance of this measure.
In form, this ordinance once again enshrines the link between digital assets and terrorist financing. While digital assets may be used for illicit purposes, recent studies show that such use is minimal, both in terms of amount and number of transactions. The press release accompanying this measure also sends a very negative message outside French national borders. The crypto industry’s international media covering the topic have, naturally, painted a negative and damaging image the country’s entire digital asset industry. The long-term impacts, both in terms of image and attractiveness, will weight heavily on the industry. Moreover, this comes during Paris Blockchain Week while thousands of professionals from around the world have their eyes set on France.
In substance, these measures undermine the French industry’s ability to compete by imposing KYC (Know Your Customer) measures which are far more constraining than in other jurisdictions and much too restrictive relative to actual risks. Undoubtedly, these measures are in reaction to the recent events which have shaken France. However, it is the position of Adan that they only stifle democratic debate in such trying times.
At its request, Adan had been consulted in the preparation of these measures: we had proposed, in conjunction with our members, more proportional and ultimately more effective measures which better met the objectives pursued. Unfortunately, they were not heard. For now, the industry contends with a promise of “new regulatory provisions” to speed up the availability of remote identification solutions. This acceleration, should it occur, would be beneficial, as remote identification procedures authorized in France are unnecessarily restrictive and complex to implement – far from ideal for concerned industry actors.
In practice, the measures deal a new blow to France’s real and perceived competitiveness. The year 2020 has demonstrated that crypto-assets can no longer be considered as a fringe asset type and here to stay – all market indicators are green. France should seize this coming revolution with determination and conviction, rather than perceived and unsubstantial risks. In particular, government intervention is needed on the persistent obstacles to ecosystem development: access to bank accounts, access to public and private financing, and the ability to advertise crypto-fiance products.
We, therefore, call for a rapid awareness at the government level and a much-awaited change of approach on the part of an ecosystem that is today rather mistreated, the height of a self-proclaimed “crypto-nation”…
Adan (L’Association pour le développement des actifs numériques) brings together crypto-assets and blockchain professionals in France. It federates the industry and promotes its development in the service of a new digital economy. Its members cover a wide range of activities: markets, custody, payments, analysis tools, project and user support, security, etc.