French regulators want digital asset platforms to bear responsibility for specific decentralized finance problems if they neglect protocol evaluations or disregard known security hazards.
On Wednesday, French officials released new recommendations aimed at modifying the Markets in Crypto-Assets Regulation of the European Union. This collaborative feedback regarding a European Commission consultation came directly from the French Treasury, the Financial Markets Authority, the central bank, along with the Prudential Supervision and Resolution Authority.
French regulators stated that crypto-asset service providers ought to be accountable for particular events impacting users when those entities actively enabled entry.
The MiCA framework leaves out digital asset services that operate in a fully decentralized fashion devoid of middlemen. The recommendation from France seeks to broaden consumer protections by placing fresh duties onto licensed exchanges linking users to decentralized finance protocols.
The Commission is currently evaluating whether MiCA requires updates as the digital asset space evolves. Its public consultation gathered opinions concerning operations falling outside the original framework’s boundaries, such as decentralized finance. The feedback gathered will shape a report destined for EU lawmakers scheduled by June 30, 2027, which may feature suggestions to alter the statute.
DeFi access could come with new obligations
French regulatory bodies suggested mandating that exchanges review decentralized finance systems prior to granting access, alongside keeping track of security flaws and suspicious transactions. They additionally supported the auditing of protocols and smart contracts, alongside platform accountability for specific occurrences.
These mandates would apply completely to major crypto-asset service providers, with requirements adjusted proportionally for smaller businesses.
Exchanges would still be permitted to link users with uncertified networks provided they perform their own independent evaluations and supply enhanced risk disclosures, according to the regulators.
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The institutions also tackled non-custodial and self-custodial storage tools by rejecting universal auditing mandates for creators. Instead, they expressed support for optional auditing regarding more sophisticated tools incorporating decentralized finance functionalities.
France pushes for wider MiCA overhaul
Aside from decentralized finance, France supported initiatives shifting oversight of major crypto-asset service providers from local agencies over to the European Securities and Markets Authority.
The agencies further recommended lowering the current threshold set by MiCA requiring 15 million daily active users on average within the EU to pinpoint major service providers. They also advised factoring in held funds, enterprise vulnerabilities, and corporate group complexity when determining which exchanges ought to fall under the oversight of the European Securities and Markets Authority.
Related: France advances stablecoin tax, eyes self-custodial wallets and exit tax proposals
Furthermore, France urged an evaluation of the asset-referenced token classification under MiCA, which pertains to tokens engineered to preserve a steady price by tethering to assets or groupings of assets. Regulators highlighted that no asset-referenced tokens have secured approval under MiCA and advised revising the e-money token rules to encompass multi-currency stablecoins.
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Originally published at https://cointelegraph.com/news/france-liability-crypto-exchange-defi-access?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound.
