AMF publishes results of cryptocurrency consultation

The Autorité des marchés financiers said that a large majority of respondents expressed support for setting up an appropriate legal framework for this new type of fundraisin

What has happened?

The French financial regulator has published the results of its consultation on initial coin offerings (ICOs).

What does this mean?

The Autorité des marchés financiers (AMF) has announced that it received 82 responses to the consultation on ICO supervision that it launched in October 2017.

The regulator said that a large majority of respondents expressed support for setting up an appropriate legal framework for this new type of fundraising.

Respondents mostly agreed that the AMF's preliminary legal analysis in its discussion paper that it is difficult to present a single approach to token issuance and ICOs, given their diversity.

The AMF presented three possible options for regulation:

  • promote a guide to best practices without changing the law (option 1);
  • extend the scope of existing texts to treat ICOs as public offerings of securities (option 2); and
  • propose new legislation adapted to ICO (option 3).

Option 3 received the strongest support, with nearly two-thirds of the responses; one-third of respondents preferred option 1 alone or in combination with another option; and only three responses supported option 2.

Respondents unanimously believed that a document is necessary to inform buyers of tokens and that it should include at least information on:

  • the project related to the ICO and its evolution;
  • rights conferred by tokens; and 
  • the accounting treatment of the funds raised during the ICO.

For almost all respondents, this document should also allow the identification of the legal entity responsible for the offer, its managers and founders and their competence.

The AMF said the majority of respondents favour the creation of rules to ensure the escrow of funds raised and the establishment of a mechanism to prevent money laundering and terrorist financing.

The AMF Board will now continue to work on the definition of a specific legal framework for ICOs.

On the same day the AMF released the results of the consultation, it also annouced that financial products based on cryptocurrencies should abide by authorisation and business conduct rules and must not be advertised online.

Next steps

If you want to take advantage of blockchain's huge potential and disruptive impact, while avoiding falling foul of ever-developing regulatory and legal requirements, visit our Hogan Lovells Engage Blockchain Toolkit.

Patrice Navarro


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