French financial regulator l'Autorité des Marchés Financiers (AMF) is preparing to introduce legislation that will give the green light for companies to launch initial coin offerings (ICOs) as legitimate investment methods.
News that the AMF is preparing a regulatory framework for ICOs was first broken by the French newspaper Les Echos on March 15. The legislation reportedly aims to encourage companies to develop blockchain projects while also providing the legal go-ahead for investors to pour funds into the projects.
France’s Ministry for the Economy and Finance confirmed to Les Echos that the new legislation being prepared by the AMF will legitimize ICOs as a legal means of investment under French law. The Ministry will engage in further consultations with stakeholders and industry experts.
Sources from France’s Finance Ministry told Les Echos that their goal is to “provide legal certainty for those who seek it, without hindering those who want to follow their own path,” noting a “rather liberal approach” and a “flexible, non-dissuasive framework.” However, the Ministry also noted that they are “not naive” and “know that these products can be risky.”
The proposed regulatory framework suggests that potential ICOs seek a license from the AMF and receive authorization before launching their funding campaigns. Licensed ICOs would be required to provide a certain guarantees about the use of investor funds, including reporting and tracking guarantees.ICOs operating without a license would not be banned, but would be considered much riskier investments than projects that did receive licenses from the AMF.
The announcement to legitimize ICOs as an investment method comes on the heels of a recent ban on 15 different cryptocurrencies and crypto-asset investment websites announced by the AMF on March 15 on the grounds that these digital currencies and websites were being unlawfully marketed as investments in France.