A New Legislative Framework For ICOs In France

The regulatory focus on initial coin offerings (ICOs) has not diminished since our last client alert where we mentioned that the public consultation of the French Financial Markets Authority (AMF) proposed to develop an ad hoc legal framework for ICOs rather than to promote a best practices guide without amending existing legislation or extending the scope of existing provisions regulating public offerings of securities to ICOs.

The AMF had previously identified the absence of clear ICO regulation as a risk factor inherent to ICOs, together with the absence of disclosure documents, possibility of loss of capital, volatility or lack of liquidity on the secondary market, money laundering and terrorist financing scams, and concerns around the viability of the underlying projects that the ICO seeks to finance.