France is the first country in the European Union to determine how regulation is to be imposed on cryptocurrencies. The Autorite des Marches Financiers (AMF) or French financial markets authority declared that bitcoin and other digital currencies are to fall under the MIFID 2 derivatives regulation of the European Union. Binary options, futures, and contracts for difference also fall under the same category.
The statement released on February 22 by the Autorite des Marches Financiers (AMF) organization declared that cryptocurrency derivatives are to fall under the regulations of the EU’s financial reforms as implemented on January 2018. According to the AMF, “A derivative with underlying cryptocurrency and unwinding by cash settlement is analysed as a financial contract. Therefore, the regulations applicable to the offering of financial instruments in France applies to derivatives on cryptocurrencies.”
The new January 2018 version of the financial reforms are included on the Markets in Financial Instruments Directive or MiFID 2, the framework of which states the need to regulate derivatives such as futures, options, swaps or forwards. The AMF was prompted to make the legal definition of cryptocurrency as a derivative and underlying asset when it saw various online cryptocurrency trading platforms offering contracts for difference, binary options, and Forex contracts, all of which used cryptocurrency as a fundamental asset. Since the law mandates that derivatives are not to be legally advertised through electronic means, online ads for digital currencies are therefore not allowed.
Though the MiFID 2 regulation list technically does not include cryptocurrency derivatives, it concluded that “a cash-settled cryptocurrency contract may qualify as a derivative, irrespective of the legal qualification of a cryptocurrency.” The coverage now allows online trading platforms with cryptocurrency offerings to be regulated as according to MiFID2 and properly cleared by the European Market Infrastructure Regulation or EMIR. Cryptocurrency derivatives are now within the jurisdiction of the anti-corruption law of France, specifically Sapin 2.