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Retail_Trading_Status

Allowed-Regulated Unknown
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#112
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Archived
Created
2025-04-12 06:46
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Executive Summary

Retail trading of cryptocurrencies is legal and regulated in France under the supervision of the Autorité des Marchés Financiers (AMF) and the Autorité de Contrôle Prudentiel et de Résolution (ACPR). The PACTE Law, enacted in 2019, established a framework for Digital Asset Service Providers (DASPs) and mandates AML/KYC compliance. France's regulatory environment is transitioning to the EU's MiCA regulation, which will replace the national framework, with a transitional period for existing DASPs. Strict KYC rules are in place, effectively banning anonymous crypto transactions.

Key Pillars

  • Primary Regulator: Autorité des Marchés Financiers (AMF) and Autorité de Contrôle Prudentiel et de Résolution (ACPR) supervise DASP/PSAN registration and licensing, AML/CFT compliance, and issue investor warnings.
  • Core Compliance Requirements: Mandatory registration with the AMF, robust KYC/AML requirements including customer due diligence and transaction monitoring, and compliance with the FATF's Travel Rule.
  • Licensing/Registration: DASPs must register with the AMF, and an optional, more stringent licensing regime is available.

Landmark Laws

  • PACTE Law (Plan d'Action pour la Croissance et la Transformation des Entreprises): Enacted on May 22, 2019, this law introduced the first comprehensive framework for Initial Coin Offerings (ICOs) and Digital Asset Service Providers (DASPs).
  • Ordinance № 2020-1544: Effective June 2021, removed the €1000 threshold for KYC checks, effectively banning anonymous accounts and requiring KYC for all transactions, regardless of amount.
  • EU's Markets in Crypto-Assets (MiCA) Regulation: Stablecoin provisions applied from June 30, 2024, and rules for Crypto-Asset Service Providers (CASPs) took effect from December 30, 2024, progressively replacing national regimes.

Considerations

  • Capital gains from occasional sales of digital assets are generally subject to a flat tax (Prélèvement Forfaitaire Unique - PFU) of 30% (including social levies), applicable when total annual sales exceed €305.
  • Crypto-to-crypto exchanges are generally not considered taxable events until conversion to fiat currency or use for purchasing goods/services.
  • Professional traders fall under a different tax regime (Bénéfices Non Commerciaux - BNC).
  • The AMF and ACPR actively monitor the market and regularly issue warnings and update blacklists of unauthorized websites offering investments in crypto-assets (especially derivatives) and Forex, emphasizing the risks associated with unregulated platforms and speculative products.

Notes

  • As of May 2024, 111 DASPs were registered with the AMF, and one (Société Générale - Forge) held a license.
  • France implemented the FATF's Travel Rule requirements from December 9, 2020.
  • Existing French-registered DASPs benefit from a transitional period until June 30, 2026, to obtain a MiCA license, allowing them to operate EU-wide via passporting. New entrants after December 30, 2024, must obtain a MiCA license directly.
  • The AMF and ACPR actively monitor the market and regulate advertising, particularly by influencers promoting crypto services, requiring them to promote only registered DASPs.

Detailed Explanation

France permits retail trading of cryptocurrencies under a defined and evolving regulatory framework. The country aims to be a European hub for crypto-assets and established regulations earlier than many EU nations. The foundational legislation is the PACTE Law (Plan d'Action pour la Croissance et la Transformation des Entreprises), enacted on May 22, 2019. This law introduced a framework for Initial Coin Offerings (ICOs) and Digital Asset Service Providers (DASPs), or Prestataires de Services sur Actifs Numériques (PSAN). The PACTE Law aimed to foster innovation while ensuring investor protection and financial stability.

The primary regulators are the Autorité des Marchés Financiers (AMF), which oversees DASP/PSAN registration and licensing, ICO approvals, compliance, and issues warnings, and the Autorité de Contrôle Prudentiel et de Résolution (ACPR), which oversees banking and insurance and AML/CFT supervision. Under the PACTE Law, entities providing certain digital asset services in France must register with the AMF, including custody of digital assets, buying/selling digital assets for fiat, exchanging digital assets, and operating a trading platform. As of May 2024, 111 DASPs were registered with the AMF, and one (Société Générale - Forge) held a license. Foreign DASPs targeting the French market must also register.

France enforces KYC and AML/CFT regulations for DASPs, including mandatory registration, customer due diligence, and transaction monitoring. Ordinance № 2020-1544, effective June 2021, removed the €1000 threshold for KYC checks, banning anonymous accounts and requiring KYC for all transactions. The FATF's Travel Rule was implemented from December 9, 2020, and further enhanced by the EU's Transfer of Funds Regulation (TFR), applicable from December 2024, mandating the collection and transmission of originator and beneficiary information for crypto transfers.

Capital gains from occasional sales of digital assets are subject to a flat tax (Prélèvement Forfaitaire Unique - PFU) of 30% when annual sales exceed €305. Crypto-to-crypto exchanges are generally not taxable until conversion to fiat or use for purchases. Professional traders fall under a different tax regime (Bénéfices Non Commerciaux - BNC). The EU's Markets in Crypto-Assets (MiCA) Regulation is progressively replacing national regimes like the PACTE framework. MiCA's provisions for stablecoins applied from June 30, 2024, and the rules for Crypto-Asset Service Providers (CASPs) took effect from December 30, 2024. Existing French-registered DASPs have a transitional period until June 30, 2026, to obtain a MiCA license. New entrants after December 30, 2024, must obtain a MiCA license directly. France has adapted its DASP registration requirements to align with MiCA.

The AMF and ACPR actively monitor the market, issue warnings, and update blacklists of unauthorized websites offering investments in crypto-assets and Forex. They regulate advertising, requiring influencers to promote only registered DASPs.

Summary Points

Here's the regulatory analysis report on Retail_Trading_Status in France, converted into a clear, well-structured bullet point format:

Retail Cryptocurrency Trading Status in France: Regulatory Overview

1. General Status:

  • Allowed-Regulated: Retail cryptocurrency trading is legal in France, operating under a defined regulatory framework.
  • France aims to be a European hub for crypto-assets.

2. Key Regulatory Bodies:

  • Autorité des Marchés Financiers (AMF):
    • Financial Markets Authority.
    • Oversees Digital Asset Service Provider (DASP/PSAN) registration and optional licensing.
    • Approves Initial Coin Offerings (ICOs).
    • Enforces compliance with regulations.
    • Issues public warnings about unauthorized platforms and risky products.
  • Autorité de Contrôle Prudentiel et de Résolution (ACPR):
    • Prudential Supervision and Resolution Authority.
    • Oversees banking and insurance sectors.
    • Involved in Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) supervision for registered entities, in conjunction with the AMF.

3. Key Legislation and Regulations:

  • PACTE Law (Plan d'Action pour la Croissance et la Transformation des Entreprises):
    • Enacted May 22, 2019.
    • Established the first comprehensive framework for ICOs and Digital Asset Service Providers (DASPs/PSANs).
    • Aims to foster innovation while ensuring investor protection and financial stability.
  • EU's Markets in Crypto-Assets (MiCA) Regulation:
    • Progressively replacing national regimes like the PACTE framework.
    • Provisions for stablecoins applied from June 30, 2024.
    • Rules for Crypto-Asset Service Providers (CASPs) took effect from December 30, 2024.
  • Ordinance № 2020-1544:
    • Effective June 2021.
    • Removed the €1000 threshold for KYC checks, effectively banning anonymous accounts.

4. DASP/PSAN Regime (Being Superseded by MiCA):

  • Registration Requirement: Entities providing certain digital asset services must register with the AMF.
    • Mandatory registration applies to providers of:
      • Custody of digital assets for third parties.
      • Buying or selling digital assets against legal tender (fiat currency).
      • Exchanging digital assets for other digital assets.
      • Operating a digital asset trading platform.
  • Licensing Regime:
    • Optional, more stringent licensing regime available.
    • Offers benefits like enhanced credibility and potentially easier access to banking services.
  • Foreign DASPs: Foreign DASPs targeting the French market must also register.
  • Transition to MiCA: Existing French-registered DASPs benefit from a transitional period until June 30, 2026, to obtain a MiCA license. New entrants after December 30, 2024, must obtain a MiCA license directly.

5. KYC/AML Requirements:

  • Mandatory Registration: DASPs must register with the AMF and comply with AML/CFT rules.
  • Customer Due Diligence: DASPs must verify the identity of their customers.
    • No minimum transaction amount for KYC checks; all transactions require KYC.
  • Transaction Monitoring: DASPs must monitor transactions for suspicious activity.
  • Travel Rule: France implemented the FATF's Travel Rule requirements from December 9, 2020.
    • Mandates the collection and transmission of originator and beneficiary information for crypto transfers.
    • Further enhanced by the EU's Transfer of Funds Regulation (TFR), applicable from December 2024.

6. Taxation:

  • Capital gains from occasional sales of digital assets by individuals are subject to a flat tax (Prélèvement Forfaitaire Unique - PFU) of 30% (including social levies).
    • Applicable when total annual sales exceed €305.
  • Crypto-to-crypto exchanges are generally not considered taxable events until conversion to fiat currency or use for purchasing goods/services.
  • Professional traders fall under a different tax regime (Bénéfices Non Commerciaux - BNC).

7. Notable Restrictions and Limitations:

  • Ban on Anonymous Accounts: KYC is required for all transactions, regardless of amount.
  • Regulatory Warnings: AMF and ACPR actively monitor the market and issue warnings about unauthorized websites and risky investments.

8. Recent Developments and Changes:

  • MiCA Implementation: France is transitioning to the EU's MiCA regulation, which will supersede the PACTE Law.
  • Enhanced Registration: France has adapted its DASP registration requirements ("enhanced registration") to align with MiCA standards.
  • Influencer Regulation: Regulating advertising, particularly by influencers promoting crypto services, requiring them to promote only registered DASPs.

Full Analysis Report

Report on Retail Cryptocurrency Trading Status in France

Topic: Retail_Trading_Status
Description: Assess whether individual citizens and residents in the country are legally permitted to buy, sell, and hold cryptocurrencies. Detail the regulatory environment surrounding this activity (e.g., KYC/AML requirements imposed on platforms, general warnings issued).

1. Current Status: Allowed-Regulated

2. Narrative Explanation:

France permits its citizens and residents to buy, sell, and hold cryptocurrencies, operating within a defined and evolving regulatory framework. The country has positioned itself as a proponent of blockchain technology and a potential European hub for crypto-assets, establishing specific regulations earlier than many other EU nations.

Historical Context and PACTE Law:
The foundational legislation for cryptocurrency regulation in France is the PACTE Law (Plan d'Action pour la Croissance et la Transformation des Entreprises), enacted on May 22, 2019. This law introduced the first comprehensive framework for Initial Coin Offerings (ICOs) and Digital Asset Service Providers (DASPs), known in French as Prestataires de Services sur Actifs Numériques (PSAN). The PACTE Law aimed to foster innovation while ensuring investor protection and financial stability.

Regulatory Authorities:
The primary regulatory bodies involved are:
* Autorité des Marchés Financiers (AMF): The Financial Markets Authority oversees the DASP/PSAN registration and optional licensing regime, ICO approvals, enforces compliance, and issues public warnings about unauthorized platforms or risky products.
* Autorité de Contrôle Prudentiel et de Résolution (ACPR): The Prudential Supervision and Resolution Authority oversees banking and insurance sectors and is involved in AML/CFT supervision for registered entities, working in conjunction with the AMF.

DASP/PSAN Regime:
Under the PACTE Law, entities providing certain digital asset services in France must register with the AMF. Mandatory registration applies to providers of:
* Custody of digital assets for third parties.
* Buying or selling digital assets against legal tender (fiat currency).
* Exchanging digital assets for other digital assets.
* Operating a digital asset trading platform.

An optional, more stringent licensing regime is also available, offering benefits like enhanced credibility and potentially easier access to banking services. As of May 2024, 111 DASPs were registered with the AMF, and one (Société Générale - Forge) held a license. Foreign DASPs targeting the French market must also register.

KYC/AML Requirements:
France enforces robust Know Your Customer (KYC) and Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) regulations for DASPs. Key requirements include:
* Mandatory Registration: DASPs must register with the AMF and comply with AML/CFT rules.
* Customer Due Diligence: DASPs must verify the identity of their customers. Initially, a €1000 threshold existed for KYC checks, but Ordinance № 2020-1544 (effective June 2021) removed this threshold, effectively banning anonymous accounts and requiring KYC for all transactions, regardless of amount.
* Transaction Monitoring: DASPs must monitor transactions for suspicious activity.
* Travel Rule: France implemented the FATF's Travel Rule requirements from December 9, 2020 (further enhanced by the EU's Transfer of Funds Regulation - TFR, applicable from December 2024), mandating the collection and transmission of originator and beneficiary information for crypto transfers.

Taxation:
Capital gains from the occasional sale of digital assets by individuals are generally subject to a flat tax (Prélèvement Forfaitaire Unique - PFU) of 30% (including social levies), applicable when total annual sales exceed €305. Crypto-to-crypto exchanges are generally not considered taxable events until conversion to fiat currency or use for purchasing goods/services. Professional traders fall under a different tax regime (Bénéfices Non Commerciaux - BNC).

Transition to MiCA:
The EU's Markets in Crypto-Assets (MiCA) Regulation, which establishes a harmonized framework across the EU, is progressively replacing national regimes like France's PACTE framework. MiCA's provisions for stablecoins applied from June 30, 2024, and the rules for Crypto-Asset Service Providers (CASPs - the EU equivalent of DASPs) took effect from December 30, 2024. Existing French-registered DASPs benefit from a transitional period until June 30, 2026, to obtain a MiCA license, allowing them to operate EU-wide via passporting. New entrants after December 30, 2024, must obtain a MiCA license directly. France has already adapted its DASP registration requirements ("enhanced registration") to align with MiCA standards, aiming to facilitate a smooth transition for French entities.

Investor Protection and Warnings:
The AMF and ACPR actively monitor the market and regularly issue warnings and update blacklists of unauthorized websites offering investments in crypto-assets (especially derivatives) and Forex, emphasizing the risks associated with unregulated platforms and speculative products. They also regulate advertising, particularly by influencers promoting crypto services, requiring them to promote only registered DASPs.

Conclusion:
Retail trading of cryptocurrencies is legal and regulated in France. The country established a pioneering framework with the PACTE Law, mandating registration and AML/KYC compliance for service providers under the supervision of the AMF and ACPR. While this national framework is being superseded by the EU's MiCA regulation, France's early adoption has prepared its market and regulators for this transition, maintaining a regulated environment for retail investors. Strict KYC rules are in place, anonymous transactions are banned, and authorities actively warn against unauthorized providers and risky investments.

3. Supporting Excerpts and Sources:

  • Legality and PACTE Law: "Yes. French residents are legally permitted to own, buy, and sell virtual assets. The regulatory framework ensures that cryptocurrency activities are conducted within a legal and secure environment." (Source: Notabene) "Promulgated on 22 May 2019, French legislation for markets in digital assets (the “PACTE law”) establishes an innovative regulatory framework for some crypto-assets industry actors and their supervision by French financial regulators, the Financial Markets Authority (Autorité des marchés financiers – AMF) and Prudential Supervision and Resolution Authority (Autorité de contrôle prudentiel et de résolution – ACPR)." (Source: Adan)

  • DASP Registration: "Under the PACTE Act's regulatory framework, a DASP is required to register with the Financial Markets Authority (Autorité des Marchés Financiers, or “AMF”) when it provides at least one of the following four services: (1) custody of digital assets on behalf of third parties; (2) buying or selling digital assets in legal currency; (3) exchanging of digital assets for other digital assets; and (4) operation of a digital asset trading platform." (Source: Global Legal Insights)

  • KYC/AML & Ban on Anonymity: "The new crypto transaction limit for KYC checks is set as €0, instead of the previous €1000 limit. This has effectively banned anonymity on the French crypto market." (Source: Sumsub, June 2021) "The PACTE Law requires DASPs to register with the Autorité des Marchés Financiers (AMF) and comply with AML and CTF obligations. This includes customer due diligence, transaction monitoring, and reporting suspicious activities..." (Source: Notabene)

  • Travel Rule: "Yes. France mandated the Travel Rule on December 9, 2020, requiring DASPs to collect and transmit identifying information for both originators and beneficiaries in cryptocurrency transactions, in line with FATF Recommendation 16." (Source: Notabene) "TFR, as part of the AML Package, which will apply to CASPs from December 2024, provides for enhanced traceability of crypto-asset transfers and identity verification (know-your-customer, or “KYC”)." (Source: Global Legal Insights)

  • Transition to MiCA: "From December 30, 2024, DASPs will have to comply with the European MiCA Regulation, which will replace the French regime... DASPs registered... before the MiCA Regulation comes into force (i.e., before December 30, 2024) will be permitted to keep offering their services to the French public for a transitional period of 18 months (i.e., until June 30, 2026)." (Source: Jones Day) "National frameworks, such as the one introduced in France in 2019, will be replaced by the MiCA framework. Companies wishing to issue crypto-assets and offer services around all digital assets... will have to apply for European approval from their national regulator. They will have to obtain the status of Crypto-Assets Services Provider (CASP)..." (Source: CACEIS)

  • Regulatory Warnings: "With the objective of protecting investors, the Autorité des Marchés Financiers (AMF) and the Autorité de Contrôle Prudentiel et de Résolution (ACPR) regularly update their black lists of websites identified as offering investments in the unregulated foreign exchange (Forex) market and in derivative products whose underlying assets include

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