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PSAN: the French ecosystem under pressure

PSAN: the French ecosystem under pressure

Members of Parliament could soon adopt a provision requiring certain companies - those not registered as PSANs - to obtain PSAN approval from 1 October 2023. An emergency meeting was organised at the end of December.

The year 2023 could probably have got off to a better start for French crypto companies.

Just before the holidays and in response to the FTX scandal, Senator Hervé Maurey (UDI, centre-right), pushed through an amendment requiring any player wanting to operate as a digital asset service provider (PSAN) to obtain "authorisation" from the Autorité des marchés financiers (AMF) no later than... 1 October 2023. However, the measure does not affect players already registered as PSANs, but only new applicants.

Since 2019 and the Pacte Act, companies have been able to operate in France with a "registration" that is less restrictive (checks on good repute and anti-money laundering). Just over fifty companies have obtained this. However, none has yet obtained authorisation.

The measure, which is now due to be put to a vote by MPs in the National Assembly on 24 January, has been heavily criticised by the ecosystem for two reasons:

Firstly, because this obligation was already provided for by the European MiCA regulation, which will come into force during 2024.

Then, and above all, because this text greatly reduces the time required for companies that are not yet registered to adapt.

Currently, companies have 12 months from this date (18 months if they are already registered at national level) to comply. This would bring the timetable forward by two years for companies that have not been registered as PSANs. "Many will not be able to get registration in time," stresses a French player, who points to the AMF's lack of resources.

Because the problem is not with crypto companies, but with the time it takes to process applications with the stock market watchdog. Some companies have been waiting for more than a year to be registered, even though the procedure is lighter than for authorisation.

According to our information, an emergency meeting was organised on 22 December with the AMF, the Treasury department (part of Bercy) and representatives of the Association for the Development of Digital Assets (Adan).

The idea of the meeting was to see how to avoid start-ups being penalised by this potential new regulation. But the meeting did not result in any progress. "We came up against a brick wall", says a participant from Adan. Pending the vote on 24 January, the political negotiations are likely to be (very) heated. According to our information, this amendment would have a good chance of being voted through because "there is more risk of MPs opposing tighter regulation after the FTX scandal", worries a leading member of the sector.

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