TBW #28: The fiscal big bang 🇫🇷 will have to wait

TBW #28: The fiscal big bang 🇫🇷 will have to wait

Read all about The Big Whale's 28th Premium newsletter.

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To devour this week

🖊️ Editor's editorial

🔥 Our exclusive news

⚡ ️ Crypto ransomware

🤖 The focus of the week


Habemus regulatio 🔥

White smoke in Brussels. Yesterday, the European Council approved the MiCA regulation, which is set to lay the foundations for the regulation of crypto-assets in Europe. All that's missing is the European Parliament's agreement next week (October 12) for the text to be definitively adopted.

Without much surprise, MEPs are expected to vote in favour of the text that will, among other things, regulate crypto service providers. But beyond the content, which will still need to be improved, it is above all the fact that Europe is the first to equip itself with a "crypto" framework that is important. Because regulation is essential, especially in a nascent and somewhat "crazy" market such as cryptos.

In 1996, the United States had adopted the "Telecommunications Act" before anyone else, which enabled them to become the undisputed champions of the Internet.

Nearly 30 years on, Europe could, in turn and thanks to MiCA, become a leader in that of cryptos and Web3.




👉 Crypto taxation: the French "big bang" will have to wait

Missed again! Those hoping that the 2023 Finance Bill would be the occasion for a change in French taxation will be disappointed. While there should be a few improvements, such as clarification of the status of 'individual' and 'professional' investors and changes to staking, that will be about the main thing. "What emerges from our discussions with the government is that the crypto issue has been dealt with belatedly", says a source close to Adan, the association representing industry professionals. With the re-election of Emmanuel Macron (read our exclusive interview) in the spring and the change of Minister for Digital Affairs, crypto topics have indeed slipped under the radar somewhat. For want of anything better, and in the meantime, Adan is pushing for the government to launch a major report on the taxation of crypto-assets. The aim is to have the legislation changed by 2024?

👉 Cryptobees are not taking off

Cryptobees - ever heard of them? Launched last spring, this NFTs project has all the makings of a "beautiful story": a major luxury brand, Guerlain, wants to fund the protection of biodiversity via the sale of digital tokens symbolising bees 🐝. Except that not everything went exactly to plan. Apart from the fact that around a third of the NFTs were not sold (which is a lot), It is above all the development of the project that is raising questions and beginning to arouse a certain amount of discontent: Several NFT holders point to Guerlain's lack of involvement over the past few weeks, the lack of dynamism in the community (the Discord channel is mainly used to collect complaints) and the "weakness" of the benefits they were promised. "Guerlain doesn't communicate", lamented one investor. Contacted, the LVMH group (owner of Guerlain), did not wish to comment. Until when?

Do you have any information?



Should ransoms be paid in cryptocurrencies?


The French government would like to make it possible for insurance companies to pay ransoms. A proposal that is provoking a fair amount of debate.

A dozen computers crashed, thousands of files inaccessible... In early September, Cyril's Paris-based start-up suffered an attack that paralysed all its activity. Since then, to restore the system, the hackers have demanded payment of a ransom of "several tens of thousands of euros" payable in crypto-currencies.

"We no longer have access to anything", explains the 35-year-old boss, who has turned to the police 👮🏽 , but doesn't know how to deal with the ransom. Should we pay? If so, how can cryptos be acquired? Who should pay? Do insurers cover the operation? Are there any special procedures?

The subject is all the more sensitive because Cyril is not an isolated case. In 2021, there were almost 2,000 requests for assistance from French companies for cases of ransomware, according to, an assistance and prevention site for online risks. Around a hundred of these requests concerned cryptocurrency-based ransomware.

French police sources suggest that the number of attacks is actually much higher. "A lot of companies don't dare come forward", confirms a source close to insurer Axa. And the phenomenon is said to be the same throughout Europe, with a global cost estimated at several billion euros, according to figures from cybersecurity firm ARS Solutions.

Paying the ransoms?

In an attempt to "help" these companies overwhelmed by events, the French government recently proposed introducing a new scheme that would authorise insurers to pay these new-style ransoms. The scheme set out in the Ministry of the Interior's Orientation and Programming Bill (LOPMI), presented to the Council of Ministers on 7 September, would affect all types of ransomware, even those based on cryptocurrencies.

As proposed by the French Treasury, which is attached to Bercy, the only condition for compensation would be that the company has lodged a complaint; and obviously that it is insured against cyber risk!"

This bill, which still has to be passed by the French Parliament (which could take several months), has caused a strong reaction in the insurance sector. "We're shooting ourselves in the foot and what's more, we're paying for the bullet", ironised one insurer.

How can we be sure that once paid the hackers will stop the attack?

When questioned, the vast majority of specialists, who do not wish to be quoted directly, explain that there is no certainty. "Most of the time when a company pays a ransom, the hackers don't bring the system back up to date. And if they do, they leave a bug", explains a good connoisseur of these subjects.

A study carried out in 2021 by Cybereason of just over 1,200 security professionals in several countries, including France, showed that 60% of French organisations that chose to pay the ransom were targeted in the following weeks.

The subject is all the more thorny because if this provision were set in stone by law, it could encourage hackers the world over to target French companies. No country has legislation providing for payment for ransomware. It's only on a case-by-case basis.

Traceability of cryptos

Some explain, however, that cryptocurrencies could also play a decisive role in getting hold of hackers. "If paying the ransom in crypto doesn't put an end to the hack, it could help track down those responsible," explains one French insurer.

The advantage of cryptocurrencies is in fact that they are... traceable. Put simply, it's like paying a ransom by marking banknotes. We could then analyse the flows and so trace the chain 🔍.

In the US, several hacker groups have been caught at their own game with cryptos. At the end of 2021, the attackers of the decentralised finance protocol Poly Network ($600 million stolen) were forced to return the funds after a traceability investigation into the blockchain highlighted their responsibility in the operation.

The most emblematic example is the Lazarus group, which has been carrying out hacks galore for years. In 2021 alone, it is said to have stolen more than a billion dollars, according to the American company Chainalysis, which has helped to identify it. The only problem: the group is North Korean, which rules out any police or legal proceedings to recover the money...


A lot of commentary is alarmist about the economic situation. Are you that pessimistic?

Honestly, we've never had so much uncertainty. Whether in economic, health (in China, editor's note), social, geopolitical, energy or even meteorological terms, the situation is very worrying and above all very unclear. The financial markets are still finding it hard to 'predict' things. We know that there will be a global recession in the developed countries - led by Europe and the United States - from the end of 2022, but we still don't know how deep it will be or how long it may last.

To top it all off, we are experiencing an unprecedented situation with a negative wealth shock in many countries: equities and bonds have collapsed in recent months, due in particular to the rise in central bank interest rates. So yes, I am rather 'pessimistic'.

Do you think that the economic situation could push central banks back towards a more accommodative monetary policy?

It's still too early to answer that question. What is certain is that if the US Federal Reserve (Fed) has to backtrack, it will not do so until inflation comes down, and that will take time. In the meantime, central banks - because this is not just about the Fed - can still intervene from time to time. We saw this last week with the Bank of England. And other central banks could follow suit. But we must not lose sight of the fact that inflation has reached such a level that the central banks will not let up until the temperature on prices has subsided.

What level of inflation could be deemed "bearable"

In the United States, inflation is currently at 8.3%. A level of between 3% and 4% could be considered "bearable". According to some estimates, this level could be reached in the second quarter of 2023. So we should not expect a rate cut for another six or nine months, if at all.

The only thing that could push the Fed to act before then would be a fall in core inflation (i.e. inflation from which fluctuating items such as energy and agricultural materials have been removed). The Fed could thus take a break from its hikes.

So we should rule out a recovery in the market for risky assets, such as equities and cryptos, before next year?

It's hard to say, as the market tends to anticipate. Tuesday's very bullish session is symptomatic in this respect: the previous day, the ISM Manufacturing index (US employment and production) raised the spectre of a recession in the US. It was negative news and yet the market reacted well because it believes that the Fed could be pushed to ease its policy...

What happened showed that bad economic news can have a positive effect on the markets. Generally speaking, the market is about six to nine months ahead of the macro.

So it's not out of the question that the markets will recover faster than expected?

I think we should continue to see a fairly volatile market with one small specificity all the same: we can feel that a lot of the bad news has been incorporated. They have less impact on the markets than the "good news".

There are still the geopolitical uncertainties. We cannot rule out the possibility that the conflict in Ukraine could get bogged down and that Russia could harden its stance even further. This could have consequences for energy supplies, and therefore de facto for the economy.

You rightly talk about geopolitical uncertainty. What do you think of banking uncertainty at a time when Credit Suisse seems to be experiencing major difficulties?

The banking sector is not immune. After that, you have to bear in mind that everything depends on the nationality of the banks, their size and their difficulties. There may be liquidity or collateral problems...

But with everyone's eyes riveted on the banks since the subprime crisis in 2008, the authorities are vigilant. We also need to distance ourselves from what is sometimes said and wrongly conveyed on social networks.

So we can rule out a 'Lehman Brothers' scenario?

A lot has changed since 2008. We no longer have the same levels of guarantees and risk-taking. Property collapsed in 2008 because there was a mountain of variable-rate loans that were, to make matters worse, over-securitised. Today, variable rates are much lower and more widespread in the United States. I wouldn't necessarily say that about the UK market...

This edition was prepared with ❤️ by Raphaël Bloch and Grégory Raymond. The Big Whale is a free and independent media. By supporting us, you are contributing to its development.

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