France: Only 2 virtual currency platforms flagged by financial watchdog in 2022

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Financial regulators in France have continued their efforts at sanitizing the industry from shady and non-compliant operators. The latest endeavor in their quest is the blacklisting of service providers in the foreign exchange and digital asset markets.

Both the Autorite des Marches Financiers (AMF) and the Prudential Supervision and Resolution Authority (ACPR) released a list of 15 platforms tagged as unauthorized investments in forex and virtual currency markets. Out of the 15, only two had a direct affinity to digital currency markets, namely 24cryptoforextrading.net and cryptoneyx.io.

As the year comes to a close, analysts have noted that the two blacklisted digital asset service firms are the only ones flagged by the regulator since the start of the year. In 2021, the AMF and the ACPR blacklisted a total of 24 firms engaged in virtual currencies.

The 92% decline in 2022 has been attributed to the chilling “crypto winter” that has plagued the industry since Q2, spelling a lack of investors’ appetite for the volatile sector. High-profile collapses like Terra, Three Arrows Capital (3AC), and FTX have shaken the confidence of new entrants into the markets as the service providers taper their operations.

The AMF and ACPR have previously warned investors to tread cautiously when investing in digital assets, saying that all virtual currency operators should be registered in France. The agencies advised that investors should run a background check on the official register run by the regulators.

While the digital assets ecosystem has operated without significant challenges from authorities, forex and traditional financial markets have been on the receiving end. In 2022, both regulators blacklisted 49 firms, a slight decrease from the record-high 61 companies in 2021.

France mulls ruling digital assets with an iron fist

For the greater part of 2022, French regulators treated the virtual currency industry with velvet gloves as they sought to improve the nation’s virtual economy. France’s positive stance toward the industry pushed Binance to consider choosing the country as its new global headquarters.

Binance CEO Changpeng Zhao said in April that France was inching its way to becoming “the leader of this industry in Europe.” Crypto.com toed Binance’s path to open an office in the country and termed it its “European HQ, opening the floodgates for more service providers.

However, the country appears to be pressing the brakes on its pro-digital asset policy following the collapse of FTX. Last week, Herve Maurey, a member of the French Senate finance commission, called for an amendment of a law that will allow firms to operate in the country without a license till 2026.

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