France plans to require cryptocurrency exchanges to take responsibility for certain DeFi events

The French Ministry of Finance, the Financial Markets Authority (AMF), the French Central Bank, and the Prudential Supervision and Resolution Authority (ACPR) jointly proposed amendments to the EU's Markets in Crypto-Assets Regulation (MiCA), requiring cryptocurrency platforms to take responsibility for customer losses when they actively provide access to DeFi protocols without reviewing the protocols or ignoring known security risks.

The French side proposed that platforms review relevant protocols before providing DeFi access and continuously monitor for vulnerabilities and suspicious activities, while also supporting the certification of protocols and smart contracts. These requirements will apply comprehensively to significant Crypto Asset Service Providers (CASP), with smaller platforms subject to proportionately adjusted obligations. France also proposed transferring the regulatory authority of significant CASPs from national regulators to the European Securities and Markets Authority (ESMA) and lowering the current EU daily active user threshold of 15 million. Additionally, France suggested re-examining the category of Asset-Referenced Tokens (ART) and adjusting the Electronic Money Token (EMT) framework to cover multi-currency stablecoins.