France threatens to block crypto license “passport” in the EU -regulatory battle

France has warned that it may try to block some crypto companies in other EU countries in their own country as part of a push to supervise the central securities regulator of the block, the head of his financial watchdog told Reuters.

The French Securities Watchdog, the AMF, is concerned that crypto companies are looking for jurisdictions with more flexible license standards under the new regime of the EU, the president, Marie-Anne Barbat-Layani.

Mica, a milestone of the rules for digital assets that are in force this year, enables crypto companies to request licenses from individual EU members, who can use them as a “passport” to work in the 27-country block. The legislation has already exposed inconsistencies in the way in which national supervisors apply the rules and raise questions about whether some licenses are granted too quickly and whether cross -border companies are sufficiently supervised.

Supervision of gaps increase alarm

At stake there is supervision of the crypto industry of several dollars, which have been warned with supervisors worldwide, the markets can destabilize and can harm investors if they are not properly supervised.

On Monday, France joined Italy and Austria when calling the European Securities and Markets Authority (ESMA), based in Paris, to take over supervision of large crypto companies, according to a position paper seen by Reuters.

In the strongest warning so far, the AMF told Reuters that France would not exclude the possibility of using the “atomic weapon” to challenge the “passport” from a license granted by another Member State.

A characteristic of the EU internal market for financial services, “passport” enables companies to operate in the block by one Member State. The AMF has not given any details about which licenses of companies can consider it challenging or on what basis.

“We are not excluding the possibility of refusing the EU passport,” said Barbat Layani. “It is very complex and not a very good signal for the internal market – it is a bit on the ‘atomary weapon’ … but it is still a possibility that we have in reserve.”

Crypto platforms “do their shopping throughout Europe and try to find a weak link that will give them a license with fewer requirements than the others,” she added, without giving specific examples.

Large differences between supervisors

In the newspaper of Monday, French AMF, the Italian Consob and the FMA of Austria called European legislators to introduce a mechanism to transfer powers to ESMA.

“The first few months of application of the Regulation have shown major differences in how crypto markets are supervised by national authorities,” said the three supervisors.

Immediately European supervision would better protect investors, they said.

The financial regulator of Malta was confronted earlier this year with control over her license-proceeding process. An ESMA assessment showed that Malta did not do enough to assess the risk when granting a license to a certain public crypto company. Malta said it was proud of his role as an “early adoptur” of digital assets regulation.

The French, Italian and Austrian supervisors did not provide examples of where supervisors had interpreted the rules differently.

Crypto companies are busy applying for mica licenses during a transition period. Luxembourg granted a license to the US-Gente Exchange Coinbase and Malta gave a permit to the Winklevoss-Founded Exchange Gemini.

France, Italy and Austria also called for mica -revisions, including stricter rules for the activities of Crypto companies outside the EU, better cyber security supervision and an assessment of how authorities manage new crypto -token offers.

France has been insisting for a long time that ESMA is gaining more power. Esma Head Verena Ross has said that she would welcome the move, but it is confronted with resistance from some EU members.