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In addition to the optional visa available for all issuers of Initial Coin Offerings, the French Pacte Law establishes a regulated status as a Digital Assets Service Provider or “DASP”.

As it stands, the implementing regulations have not yet been published and will come into force towards the end of 2019.

Avec Thibault Verbiest

Since the PACTE law came into force in France, a procedure for obtaining a visa for any public Initial Coin Offering has been provided for before the French Financial Markets Authority (the AMF).

In this context, the AMF requires issuers applying for a visa to set up a procedure to secure the funds collected during the ICO.

Avec Thibault Verbiest

The French law of 22 May 2019 (known as the “PACTE law“) introduced a specific regime for ICOs, providing for the principle of an optional approval/visa issued by the AMF. This new regime, designed to promote the development of ICOs, does not apply to the issuance of tokens assimilated to financial securities (“Security Token Offering”/ “STO”) but exclusively to the issuance of so-called “utility tokens”.

Issuers of tokens falling into the category of utility tokens have the right (but not the obligation) to apply for a visa in order to make an offer to the public of tokens. The AMF visa is not issued to a token issuer but to a token offer.

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Tokenisation is the creation of the digital representation of an asset on a blockchain.

The tokenisation process involves the registration of an asset and its rights on a digital token which is then recorded on a shared electronic recording device like blockchain.

The respective project leaders are the only ones who can decide on the asset they want to integrate into their security token. Like utility tokens, whose utility and economy must be carefully designed, it is necessary to create a security token that refers to an underlying asset.

Real estate tokenisation is an essential subject that affects a huge global market. Indeed, the real estate investment market is generating several trillion dollars each year and more than half of every asset held by individuals consists of at least one real estate asset.

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With the future French PACTE law, currently under discussion, the legislator wishes to create an incentivising legal environment for all crypto-active actors.

The French legislator’s approach is very clear: to identify the issues on which its intervention is necessary, particularly to protect investors, while at the same time allowing this new means of raising funds to prove its worth.

Indeed, while it was already announced that a legal framework would be put in place for token issuers (also known as “Initial Coin Offerings” – “ICOs”), a recent amendment aims to extend a broader framework to all crypto-active players.

The legislation is still evolving as amendments are adopted through parliamentary debates.

Avec Thibault Verbiest