The world’s second-largest crypto exchange, Coinbase, revealed in a Thursday, December 21 update hailing successful registration with the French markets regulator. The San Francisco-headquartered crypto exchange hailed the license granted by France’s Autorité des Marchés Financiers (AMF) as a gateway to expand services into a key European market.
France’s AMF watchdog granted Coinbase approval to run virtual asset service provider (VASP) operations. The VASP license green lights the Brian Armstrong-led Coinbase into operating digital currency services in the seventh largest economy, as per Forbes data.
Coinbase Lauds Securing France’s VASP License
Coinbase disclosed in Thursday’s statement that the VASP registration will enable it to offer custodial services and a trading platform for digital assets. Besides, the VASP approval allows Coinbase to buy and sell digital assets using legal tender and in-kind transactions.
Like others across Europe, French regulators have embarked on a catch-up situation in recent years with the emergence of the blockchain and digital assets ecosystem. The initiative has highlighted the necessity to strike a balance in payment systems improvement, trading, and safeguarding consumers.
The French regulator has devoted its policy formulation and amendment to comply with the European Union’s resolve to introduce the Markets in Crypto Assets (MiCA) regulation. The project has involved creating a harmonized framework for the cryptocurrency companies to ensure they operate within a regulated manner within the bloc.
Under the MiCA framework, it eradicates the need for crypto companies to secure registration in each member state. Instead, it harmonizes the framework, allowing crypto firms to use the VASP license secured in one market and passport into other markets across the block.
The VASP registration realized by the California-based Coinbase is a critical milestone as it pursues European expansion. The firm’s spokesperson hailed the approval by AMF, illustrating that it coincides with a period in which it faces an uncertain regulatory environment in the home country.
Coinbase Decries Harsh Enforcement Actions Against Crypto Firms
The Coinbase executive reflected on the recent harsh enforcement actions undertaken against crypto firms by the US regulators.
Although noncommittal on the specific action, the spokesperson waded into the November incident, where the Department of Justice (DoJ) announced a $4.3 billion settlement with Binance. Besides, the chief executive resigned in a guilty plea to the felony charges of failing to undertake measures to avert money laundering at the crypto exchange.
The US Securities and Exchange Commission (SEC) in 2023 ran an aggressive campaign that claimed several victims and costly lawsuits against crypto firms. The strict enforcement actions undertaken by the Gary Gensler-chaired regulator feature lawsuits alleging Coinbase, just like its rival Binance, runs illegal dealings of securities.
SEC classifies most crypto tokens as securities, a label that mandates seeking registration with the regulator. The security classification obligates copious transparency from the token issuers and crypto exchanges, such as regular financial disclosures and filing detailing business undertakings.
Coinbase has, in the past years, fired back at the securities watchdog and vigorously defended its position of strict compliance with financial regulations.
The company is currently embroiled in a rulemaking petition to compel the SEC to end regulation by enforcement. It challenges the SEC’s emphasis on hitting crypto companies with civil penalties rather than setting a clear regulatory framework.
Coinbase Hails France Positioning as Global Crypto Hub
Coinbase spokesperson pointed out France’s resolve to position itself among the crypto innovation leaders. Lately, the third-largest economy in Europe has touted its prowess in cloud computing and artificial intelligence technologies. Such aligns with the bid by President Emmanuel Macros to transform France into a global tech hub.
The Coinbase executive observed that France has committed $36.5 billion in diverse investments featuring subsidies and state funding. The allocation is guided by the France 2030 plan to catapult the country into Web3 leadership.
Coinbase expansion into Europe via France offers the ideal gateway comprising the desired infrastructure. In particular, France is home to a $1.4 billion Ledger that carved a niche in crypto custody services.
Coinbase joined other crypto giants, including Circle, Crypto.com, and Binance, that made Paris their base to pursue the European market. The Armstrong-led firm replicates Circle – the issuer of stablecoin USD Coin (USDC) – that recently secured the French VASP license from the AMF.
Given the accelerated crypto adoption in the country, France is set to offer Coinbase a receptive landing base. The population embraces cryptos as the sector recovers from the streak of collapses and bankruptcies witnessed in 2022.
In a review of data provided by Toluna, 10% of the country’s adults admit to owning crypto assets. Another 24% of the adult population confess plans to acquire, sell and trade the crypto within the coming year. Such constitutes a crypto-friendly population that Coinbase can tap into and make a loyal customer base.
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