After becoming one of the first countries to authorize the registration and transfer of unlisted securities using blockchain technology, France has now adopted an innovative legal framework on law on Business Growth and Transformation, the so-called PACTE Law, governing initial coin offerings (ICOs), digital assets and digital assets services providers (DASPs) with the aim to be at the forefront of the blockchain technology. The entry into force of this legislation, adopted by the French Parliament in April 2019, is however subject to a pending decree and specific rules from the French financial market authority (AMF) expected to be published soon.
Digital assets include tokens (except those qualifying as financial instruments) and digitally-registered assets, including cryptocurrencies, that are accepted as a means of exchange that can be transferred, stored or exchanged electronically. The definition of digital assets is very broad and not limited to ICO Tokens and virtual currencies (as defined under European law) and potentially extends to tokens related to other industries (retail, transportation, healthcare, media, etc.).
DASPs providing the service of digital asset custody or purchase / sale of digital assets in exchange for legal tender are subject to mandatory registration with the AMF. Conversely, DASPs only providing other services on digital assets (e.g. operation of a digital assets trading platform, purchase/sale of digital assets against other digital assets, reception and transmission of orders or placement on digital assets) may apply for an optional license, subject to compliance with a set of rules (internal control procedures, resilient IT system, transparent pricing policy, etc.).
Public offering of tokens is subject to specific rules including an optional registration (visa) with the AMF requiring the drafting (in English or French) of a white paper made available to investors. The AMF shall publish on its website a white list of ICOs benefiting from its visa as well as a “black list” of ICOs and DASPs not complying with its regulation.
The PACTE Law further entitles Professional specialized investment funds and Professional private equity investment funds to invest in digital assets, subject to specific conditions and limits.
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