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While the ICO industry has witnessed a declining trend in 2018 because of reported scams and many unsuccessful projects, France has given the industry a new look. The OECD (Organization for Economic Cooperation and Development) giant on Wednesday passed a legislative framework for ICOs, which undoubtedly, is the most comprehensive and first national-backed regulation for the Initial Coin Offering market.
The body in charge, the Authorite des Marches Financiers (AMF) or Financial Markets Regulator (FCA) in English, is the French version of the Securities and Exchange Commission and will handle ICO reviews. The AMF will scrutinize ICO whitepapers, and after establishing that a particular ICO is not a scam or fraud, they will issue a license, giving the project the go-ahead.
Though the new law is not clear on the exact requirements that ICOs are supposed to meet, it is inclined towards providing a favorable ruling, to regulate ICOs, and to protect investors. The regulation posits that current token issues do not have the features of financial security, which contradicts the SEC’s statement that most ICOs are securities.
For ICO projects, this new legislation is not compulsory, meaning it is not required to apply for a license. It is done to test the regulation and see how it would operate in such a highly volatile and unregulated market, and to help check scams that strip investors of their hard earned money. On the part of an ICO project, however, it would be good to apply for a review to get investor confidence. The license provided will also allow projects to have bank accounts.
The new legislation is the genesis of a series of bills that will be pushed to parliament for approval. The bills form part President Emanuel Macron’s election campaign promise of implementing the PACTE (“Plan d’Action pour la Croissance et la Transformation des Entreprises”); Action plan for business growth and reform) – on a larger scale and create a business-friendly environment in the country and the sub-region.
Though critics said the legislation still needs a lot of clarification in its implementation, the crypto community in France sees this move as an endorsement to operate – and a larger goal that will bootstrap cryptocurrencies and ICOs into the mainstream. It’s the beginning of a win for crypto in France.