“Crypto Assets Shouldn’t Be a Lawless Zone”

Very involved in the topic of cryptocurrencies, Pierre Person, the deputy from Paris (La République En Marche), discusses the issues of European regulation that is currently being prepared. According to him, ” we need to find an appropriate regulatory response

How long have you been interested in cryptocurrencies?

Peter Person: Back in 2018 I wrote my first report on crypto assets. It contained nearly thirty proposals to build the first legal framework in Europe. These proposals have also been used by the Autorité des marchés financiers (AMF) to create the first regulatory statute allowing the supervision of digital asset service providers (PSAN). This French regulation was introduced in 2019. I then made several changes under the Financial Act to specifically clarify the taxation of natural persons holding crypto assets.

My second report will be published shortly. It takes a full inventory of France’s crypto-asset ecosystem, which has evolved tremendously in four years. However, it is now necessary to better understand the different problems, to understand these new technologies and their uses.

What are your thoughts on the MiCA (Markets in Crypto Assets) regulation being discussed in Europe?

PP: The initial premise was commendable: to eliminate the differences between the different legal systems of the Member States. The aim is to better protect savers and prevent unfair competition between jurisdictions. In addition, the European scale will allow the “passportability” of approvals. However, many changes have been added. These demonstrate a total misunderstanding of the subject and an unprecedented violation of the principle of technological neutrality. There is now a desire to regulate the technological object, well beyond its use.

In addition, the European Parliament wants to regulate the sector by transposing the standards that apply today to traditional, centralized financing. However, in a fully globalized and decentralized universe, we need to show imagination and agility. We need to design new standards adapted to this new technology. So a substantial part of these rules is completely unsuitable for crypto assets.

Why are they not suitable?

PP: Some rules are stricter than those applied to traditional financing. This shows the presumption of guilt that rests in the minds of some MEPs about this technology and its users. However, the facts of money laundering or terrorist financing have never been proven by those who are constantly chanting them. Therefore, the draft Transfer of Funds Regulation (TFR) aims to automatically remove the “pseudonymity” of crypto-asset based transactions.

This means centralization of data by the States and knowledge of all information related to a portfolio, the balance and all transactions. It violates individual freedoms. Once again, European regulations threaten to have the opposite effect. It will encourage investors to turn to unregulated players outside of Europe. Crypto assets should not be an area of ​​lawlessness, but an appropriate regulatory response must be found. However, the Mica Regulation should be discussed again in the trilogue by the Commission, Parliament and Council before the summer. Changes can therefore still be expected before the implementation of this regulation, which is planned for 2025.

What would you recommend to savers interested in cryptocurrencies?

PP: An investor should know the basics of blockchain and educate themselves for any investment. Misunderstanding the technology or how it works facilitates the development of scams. Choosing a service provider registered in France also remains the best option to limit the risks. But beware, crypto assets remain an immature market that can be subject to excesses. You need to keep an eye on your exposure level and know that it is possible to lose a significant amount of your capital. However, by taking precautions, crypto assets can be wise. Studies have shown that holding bitcoin for at least four years leads to positive performance.

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