French influencers may be banned from endorsing unlicensed crypto
Quick Take
- The French National Assembly voted in favor of an amendment that would ban influencers from promoting crypto assets which have not been licensed by financial regulators. As of the time of the vote, no digital assets have been licensed in France.
- The changing regulatory landscape over the coming years may ease the proposed rules.
Policymakers in the French National Assembly voted in favor of an amendment that would ban influencers from promoting crypto assets which haven’t received a stamp of approval from government regulators.
Since no company currently holds a Financial Monetary Authority license - which is currently optional — influencers in France are essentially not allowed to endorse any digital asset. Those who violate the rules could face a two-year prison sentence as well as a fine of €30,000 ($32,000).
French lawmakers approved the amendment in a bill addressing scams coming from influencers on social networks. Alongside crypto, the ban was also placed on gambling and certain pharmaceutical products and procedures.
The move comes as celebrity endorsements of digital assets have caught the attention of regulators around the world. In the U.S., the Securities and Exchange Commission targeted Kim Kardashian over an ad endorsing the token belonging to EthereumMax in a case that was settled with a $1.3 million fine last October.
A lawsuit last week claimed a group of social media influencers promoted fallen crypto exchange FTX to their followers without disclosure of compensation.
Changing regulatory landscape
In France, crypto firms currently have two options to become regulated — the first being registration and the second a hard-to-attain license. While major players like Binance, Societe Generale and, most recently, Circle have registered with the AMF, not a single firm has gained the license.
New rules are set to come into effect in January 2024, tiering up the registration requirements for new firms. These requirements will bridge over into the European Union’s Markets in Crypto-Assets regulation, which is expected to come into force later in 2024, but give firms additional time to transition.
MiCA offers a passporting regime, meaning that a company licensed in one EU country can extend its services to any of the others in the 27-nation bloc. This regime may ease the implications of the ban on influencer’s crypto ads in the coming years.
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