French Regulator AMF bans online cryptocurrency derivatives ads in a bid to ensure full compliance with the latest set of European Union financial regulations MiFID II.
CryptoToday – French financial markets regulatory authority Autorité des marchés financiers (AMF) has published a statement today in relation to the cryptocurrency derivatives. Specifically, the French markets’ supervisor ruled out that the cryptocurrency derivatives require authorization under the new financial European Union’s regulatory framework, MiFID II.
French Regulator AMF Bans Online Cryptocurrency Derivatives Ads
The AMF states that derivatives cannot be legally promoted electronically. Therefore, the regulator outlined that the cryptocurrency derivatives operators should not have the right to advertise their products online.
The AMF’s official statement is as follows:
“The AMF has reached the conclusion that platforms which offer these products must abide by the authorisation and business conduct rules. Moreover, these products must not be advertised via electronic means.”
The Markets in Financial Instruments Directive (MiFID II) has come into force at the beginning of this year. The regulatory framework aims to unify all the financial markets’ best practices across the EU bloc. All of the participants in the options, swaps or forwards, and futures markets should comply with the new requirements. Additionally, under the new regulations set, financial market supervisors should oversee the derivatives.
Cryptocurrency derivatives do not officially fall under the MiFID II regulations. Nevertheless, the AMF states that “a cash-settled cryptocurrency contract may qualify as a derivative, irrespective of the legal qualification of a cryptocurrency.”
AMF Cryptocurrency Derivatives Legal Definition
The French regulator has carried out an investigation into the legal definition of a cryptocurrency. The watchdog has studied both cryptocurrency derivative and underlying asset aspects.
The AMF has moved to implement the scrutiny after a number of cryptocurrency trading platforms started to offer Binary Options, Forex, and Contracts for Difference (CFDs) contracts. It appears that the entities were claiming that the cryptocurrency was an underlying asset. In these cases, investors had the opportunity to bet on the rise/drop of the cryptocurrency price. They can do so even without actually holding an underlying asset.
Online trading platforms that offer cryptocurrency derivatives should have the registration under the MiFID II. Also, they have to be cleared under the European Market Infrastructure Regulation (EMIR).
The regulator also states that cryptocurrency derivatives are falling under the jurisdiction of France anti-corruption Sapin II law.
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