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French Lawmakers Adopt Legal Framework For ICOs

After slashing taxes on profits made from cryptocurrency trading by more than 50%, France has now implemented a new legal framework for initial coin offerings (ICOs). Is Europe’s 3rd largest economy transforming into a haven for cryptocurrency?

New French Law Sets Out Guidelines For ICOs

French lawmakers have passed a law setting out guidelines for ICOs, Finance Minister Bruno Le Maire has announced. Mr Le Maire said on Twiitter that Article 26 had been “adopted in parliamentary committee”, as part of French President Emmanuel Macron’s broader plans to improve business growth and transformation. “A legal framework for ICO is created,” he said, in translation. “This legal framework will attract innovators from around the world #blockchain…”

The legislation allows the French financial regulator Authorité des Marchés Financiers (AMF) to approve and issue permits to businesses going to float ICOs in France – but only if “those projects provide specific guarantees for investors.” Issuers will be likely to give full disclosure to the AMF, allowing buyers to make informed decisions about the ICO. The French regulator has previously raised concern over the lack of clear regulation on token sales “as an inherent risk factor of ICOs”, heightening the possibility of loss, money laundering and terrorist funding. In an ICO, companies raise money by creating new digital coins and offering them to the public for sale. ICOs imitate IPOs common with stocks, but without the rigour of regulatory oversight, which in a sense makes them attractive to start-ups keen on getting around bureaucratic red-tape.

New Haven For Cryptocurrency?

Under President Macron, France is trying to transform itself into a haven for business, including the business of cryptocurrency. Earlier this year, Mr Macron launched the Action Plan for Business Growth and Transformation (PACTE), which, among other things, aims to make it easy for companies to operate in France, and to lay out legal guidelines for fund raising via token sales. The AMF began public consultations leading to the new law on ICOs some months back. In July, the French administration cut the cryptocurrency tax by more than half to 19%, in a move largely viewed as positive for the development of crypto and the blockchain ecosytem in the world’s 6th largest economy.

Explaining the new legal framework in June, law firm Kramer Levin stated: “… the legislation provides a description of tokens, indicating that a token is intangible property representing, in numerical form, one or more rights which can be issued, registered, conserved or transferred using a shared electronic registration mechanism that facilitates the identification, directly or indirectly, of the owner of said property.”

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