Is cryptocurrency legal in France?

France and Cryptocurrency

France Cryptocurrency Laws
Regulation of Digital Currencies: Cryptocurrency, Bitcoins, Blockchain Technology

In its 2011 annual report, Tracfin (the French financial intelligence unit tasked with fighting financial fraud, money laundering, and terrorism financing) was the first French authority to mention Bitcoin.[1] The first French regulation of cryptocurrency came in January 2014, the Prudential Supervision and Resolution Authority (ACPR), the French banking and insurance regulatory authority, stated that entities receiving legal currency on behalf of clients in relation to the purchase or sale of cryptocurrencies were required to obtain a license to provide payment services.[2]

Digital Currency – Blockchains

In December 2016, cryptocurrency trading platforms and brokers were included in the list of entities subject to the anti-money laundering legislation (Article 2 of Ordinance No. 2016-1635 modifying Article L. 561-2 of the Monetary and Financial Code (MFC).[3]  Additionally, in 2016 the French government started working on a legal framework allowing the use of blockchain for the registration of securities.[4]  Registration on a blockchain was first limited to short-term bonds dedicated to small and medium-sized enterprises (SMEs), but was soon extended to all unlisted securities pursuant to Ordinance No. 2017-1674, which went into effect on December 8, 2017.[5]

“Following an extended consultation of experts and actors of the French cryptocurrency and ICO economy, it was finally decided to create a dedicated framework for ICOs, rather than try to include them in the scope of the existing regulation of securities offerings.”[6] This legal framework was included in Act No. 2019-486 of May 22, 2019 on the growth and transformation of enterprises (the PACTE Act), which contains many measures aimed at facilitating the growth of SMEs and giving employees and stakeholders more control over corporations.[7]

P.S. Insights on Cryptocurrency Legal Issues

Most jurisdictions and authorities have yet to enact laws governing cryptocurrencies, meaning that, for most countries, the legality of crypto mining remains unclear.

Under the Financial Crimes Enforcement Network (FinCEN), crypto miners are considered money transmitters, so they may be subject to the laws that govern that activity. In Israel, for instance, crypto mining is treated as a business and is subject to corporate income tax. In India and elsewhere, regulatory uncertainty persists, although Canada and the United States are relatively friendly to crypto mining.

However, apart from jurisdictions that have specifically banned cryptocurrency-related activities, very few countries prohibit crypto mining.

Our Freeman Law Cryptocurrency Law Resource page provides a summary of the legal status of cryptocurrency for each country across the globe with statutory or regulatory provisions governing cryptocurrency.  The globe below provides links to country-by-country summaries:

Podcast:
The Freeman Law Project – Cryptocurrency Regulation and Taxation: A Brief Primer

Freeman Law can help with digital currencies, tax planning, and tax compliance.   Contact us now or Schedule a consultation or call (214) 984-3410 to discuss your cryptocurrency and blockchain technology concerns.

 


[1] Hubert de Vauplane & Victor Charpiat, The Virtual Currency Regulation Review: France, Kramer Levin Naftalis & Frankel LLP, (Sept. 6, 2020), https://thelawreviews.co.uk/authors/Hubert_de_Vauplane.

[2] ACPR, Position 2014-P-01, https://acpr.banque-france.fr/sites/default/files/20140101_acpr_position_bitcoin.pdf.

[3] de Vauplane, supra note 10.

[4] Id.

[5] Id.

[6] Initial coin offering (ICO) is the cryptocurrency industry’s equivalent to an initial public offering (IPO).

[7] de Vauplane, supra note 10.

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