Just in the nick of time, CACEIS, a banking institution, sidestepped the new crypto regulations in France by securing its registration.
As the asset servicing branch of Crédit Agricole and Santander, CACEIS Bank is now officially a licensed crypto custodian in France, as stated on the regulator’s website on June 20.
CACEIS prides itself on being a dominant player in European asset servicing, catering to a range of clients including asset managers, insurance companies, brokers, pension funds, and real estate funds. The institution delivers a wide array of services, from clearing and fund administration to middle office outsourcing. As a crypto custodian, CACEIS will be responsible for safeguarding users’ private keys, bolstering security measures for its institutional clientele.
The bank’s website highlights that, as of December 2021, CACEIS had a whopping 4.6 trillion euros ($5.06 trillion) worth of assets under custody and 2.4 trillion euros ($2.6 trillion) in assets under management.
France’s stock market regulator, Autorité des Marchés Financiers (AMF), necessitates businesses looking to provide custody services to register. The requirement also extends to other crypto operations, including digital assets trading platforms.
The strategic timing of CACEIS’s registration allowed it to sidestep forthcoming, more stringent regulations. Starting in July, digital asset providers in France must adhere to stricter Anti-Money Laundering (AML) measures, such as mandatory segregation of customer funds and detailed risk and conflict of interest disclosures.
However, CACEIS and over 60 other crypto firms registered with AMF won’t be subjected to these new rules. Instead, these companies will be governed by the European Union’s Markets in Crypto-Assets (MiCA) legislation, due to come into effect next year.
One noteworthy AMF-registered crypto company is Binance, which has been under preliminary investigation since 2022, according to a report in French newspaper Le Monde. The exchange’s local arm reportedly fell short in complying with Know Your Customer procedures and may have been involved in money laundering, as per the Paris Prosecutor’s Office.
France has been progressively fortifying its regulations on crypto businesses. One of the latest policy updates is a law limiting local crypto companies’ use of influencer marketing. Non-compliance with this law could lead to up to two years of imprisonment and a hefty fine of 300,000 euros ($328,000), along with the potential banning of the influencer.
The recent developments surrounding crypto regulations in France underscore the evolving landscape of cryptocurrency governance worldwide. As authorities strive to bring transparency and security into this rapidly expanding financial sphere, businesses must adapt quickly to these changes.
For institutional clients, choosing a service provider with robust security measures is essential. CACEIS’s new role as a licensed crypto custodian, given its wealth of experience in asset servicing, provides institutions with a reliable and secure option for managing their crypto assets.
Furthermore, the developments in France and the European Union can provide a benchmark for other nations considering similar regulatory frameworks. Observing how these new policies unfold and affect the industry might offer invaluable insights for lawmakers globally. It highlights the importance of having a balanced approach towards regulation, ensuring consumer protection, and enabling innovation in the realm of digital assets.