France Proposes Holding Crypto Platforms Liable for DeFi Risks Under Revised MiCA Rules

Holding Platforms Accountable for DeFi Interactions

French authorities released proposals on Wednesday to amend the European Union’s Markets in Crypto-Assets Regulation (MiCA). The joint response came from France’s Ministry of Finance, the Financial Markets Authority (AMF), the central bank, and the Prudential Supervision and Resolution Authority (ACPR) as part of the European Commission’s consultation process.

According to French officials, crypto-asset service providers (CASPs) should bear responsibility for some incidents affecting clients when they have actively facilitated access to services.

Currently, MiCA does not cover crypto services that operate in a fully decentralized manner without intermediaries. France’s proposal aims to enhance investor protection by imposing new obligations on regulated platforms that connect users to DeFi protocols.

The European Commission is evaluating whether MiCA requires updates to keep pace with crypto market developments. This consultation has sought input on activities outside MiCA’s original remit, such as DeFi. The feedback will inform a report for EU legislators due by June 30, 2027, potentially including recommendations for regulatory changes.

New Obligations Anticipated for Platforms Offering DeFi Access

France’s proposal would mandate platforms to assess DeFi protocols before granting access and to monitor them for security flaws and suspicious behavior. French authorities also advocate for certification of protocols and smart contracts, alongside assigning platform liability for applicable incidents.

These obligations would be fully applied to major CASPs, with scaled requirements designed for smaller providers.

Platforms could still facilitate access to uncertified protocols if they conduct their own comprehensive due diligence and provide detailed risk disclosures, officials noted.

Regarding non-custodial or self-custodial wallets, French authorities oppose mandatory certification of developers across the board. They do support voluntary certification, particularly for advanced wallets that integrate DeFi functionalities.

France Advocates Broader MiCA Revisions

Beyond DeFi, France supports shifting supervision of 'significant CASPs' from national regulators to the European Securities and Markets Authority (ESMA).

They also propose lowering the current MiCA threshold of 15 million average daily active users within the EU for designating significant CASPs. Additional criteria such as custody assets, operational risks, and organizational complexity should also guide which platforms come under ESMA’s supervision, according to the proposal.

France called for revisiting the asset-referenced token (ART) category under MiCA, which governs tokens meant to keep stable value through asset backing. Given that no ARTs have been authorized so far, authorities suggest adapting the e-money token (EMT) framework to encompass multicurrency stablecoins.