France wants DeFi gatekeepers on the hook in its MiCA remix

France’s Treasury, the Financial Markets Authority (AMF), the central bank and the Prudential Supervision and Resolution Authority (ACPR) have proposed that crypto-asset service providers face liability for certain decentralized finance (DeFi) incidents affecting clients if they fail to vet protocols or ignore known security risks.

The authorities published the proposals Wednesday in a joint response to a European Commission consultation on revising the European Union’s Markets in Crypto-Assets Regulation (MiCA). “CASPs [crypto-asset service providers] should be liable for certain incidents affecting clients where they actively facilitated access,” French authorities said.

MiCA excludes crypto services provided in a fully decentralized manner without intermediaries, but France’s proposal would impose additional duties on regulated platforms connecting customers to DeFi protocols. Those platforms would be required to vet protocols before offering access and monitor them for vulnerabilities and suspicious activity. The authorities also backed certification of protocols and smart contracts and platform liability for certain incidents. Requirements would apply fully to significant CASPs, with obligations scaled for smaller providers; platforms could still connect customers to uncertified protocols if they conduct their own due diligence and provide enhanced risk disclosures.

The European Commission is reviewing whether MiCA needs updating as crypto markets develop, and its consultation sought views on activities outside the law’s original scope, including DeFi. The responses will inform a report to EU lawmakers due by June 30, 2027, which could include proposals to amend the law.

The authorities also addressed non-custodial and self-custodial wallets, opposing blanket certification requirements for developers and favoring voluntary certification for more advanced wallets that integrate DeFi services. Beyond DeFi, France backed transferring supervision of “significant CASPs” from national regulators to the European Securities and Markets Authority (ESMA). It also proposed lowering MiCA’s current threshold of 15 million average daily active users in the EU for identifying significant CASPs and considering custody assets, business risks and group complexity when deciding which platforms should fall under ESMA supervision.

France also called for a review of MiCA’s asset-referenced token (ART) category, which covers tokens designed to maintain a stable value by referencing assets or combinations of assets. The authorities noted that no ARTs had been authorized under MiCA and proposed adapting the e-money token (EMT) framework to cover multi-asset-referenced tokens.