EU crypto regulation tested as France weighs ‘passporting’ block

While some legal experts see France’s threat as legally feasible, others argue that it’s only a warning for crypto firms looking for licensing loopholes in the EU.

France’s warning that it may try to block cryptocurrency companies from operating in the country under licenses issued by other European Union member states — known as passporting — has raised questions about enforcement of the 27-nation bloc’s flagship crypto law.

France’s securities regulator, the Autorité des Marchés Financiers (AMF), is considering a ban on crypto firms operating in France under licenses obtained in other member states, The move reportedly stems from the AMF’s concern that some crypto companies seek licenses in more lenient EU jurisdictions.

The warning came less than a year after the EU’s Markets in Crypto-Assets Regulation (MiCA) took effect for crypto-asset service providers. MiCA was designed to create a harmonized framework across Europe and prevent the kind of regulatory arbitrage the AMF is flagging.

While some legal experts see this as going against MiCA regulations, other industry watchers say it is technically feasible.

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“MiCA was designed to create one harmonised framework and give firms access to a single regulated market across the EU. That promise is now under pressure,” said Marina Markezic, executive director of the European Crypto Initiative (EUCI). “From what we’ve seen, blocking passporting under MiCA is technically possible, though it comes with significant legal complexity.”

The recent position papers highlight “growing tensions over how MiCA should be enforced, with national authorities taking diverging views on key supervisory questions,” she added.