France’s Parliament Adopts an Innovative New Framework for Approving Initial Coin Offerings

On April 11, 2019, the French parliament adopted a law (the “Loi Pacte”or “Law”) that establishes a new regulatory framework for initial coin offerings of blockchain based tokens by entities established or registered in France.

At the heart of the Law’s ICO provisions is an innovative framework that will allow issuers to request an optional visa from the French Financial Markets Authority prior to undertaking an ICO.  ICOs of tokens that are not financial instruments will still be permitted without a visa, but the expectation is that issuers obtaining the visa for an offering of such tokens will have a distinct advantage relative to offers that lack such approval.  ICO issuers that do not obtain a visa also will be subject to restrictions on certain kinds of advertising and sales methods.  By “white-listing” issuers serious enough to seek and obtain an AMF visa, France hopes to give investors a new tool for screening out potentially fraudulent offers and help ICO issuers establish the investor confidence necessary to secure funding.  Many of the details of the new framework will be specified in implementing regulations to be adopted by the AMF, which are expected to be issued shortly after the Law is officially promulgated.  The AMF published an overview of its planned regulations on April 15, 2019, providing further clarity on how the regime will work in practice.

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