PSAN approval: scepticism from traditional players

While the crypto industry is looking favourably on the imminent arrival of the first PSAN (digital asset service provider) accreditations, this open sesame will not necessarily open all doors for crypto players. Starting with those of major institutional players, such as banks and insurers.

"Not all companies benefiting from PSAN approval will have the opportunity to work with banks and insurers," warns Arnaud Grünthaler, a partner lawyer at Fieldfisher.

"The compliance teams of large companies have much more sophisticated procedures, particularly concerning the traceability of funds, and the latter feel that the requirements imposed by authorisation are not sufficient", he insists.

To date, and according to the recommendations of the ACPR, the French supervisory body for banks and insurers, PSANs (registered or with authorisation) have no concrete obligations in terms of traceability. The recommendations only require players to take "their responsibilities" in the face of their obligations to combat money laundering and the financing of terrorism.

The result is that most players, especially crypto start-ups, have set up systems where they can trace back to two - or even three - beneficiaries of the cryptos that pass through their services 🔎. A tracing capacity deemed too weak by many financial players: some are calling for the ability to trace up to 150 beneficiaries! 😅

"If beyond the three beneficiaries we find entities like Hamas, that could pose a problem and financial institutions don't want to get involved," stresses Arnaud Grünthaler.

For institutional players wishing to invest in the digital asset space (and there are many of them), the greatest likelihood is that they will only accept traditional players evolving with their requirements. "That's why they'll never work with Binance, even though it's the biggest player in the sector," murmurs one expert.

So far, two players seem to be ticking the boxes: SG-Forge (a subsidiary of Société Générale), CACEIS (a subsidiary of Crédit Agricole) and probably BNP Paribas, whose PSAN application should be successful in the coming weeks. For pure crypto players, of which there are nearly 80 in France, things are likely to be more complicated.