French authorities have proposed making regulated cryptocurrency platforms responsible for certain incidents involving DeFi access when they fail to vet protocols or disregard known security risks. The proposal would add duties for intermediaries connecting customers to decentralized finance, rather than remove MiCA’s exclusion for fully decentralized services.
Key Takeaways
- France wants liability for certain client incidents where crypto platforms actively facilitated access to DeFi.
- The proposal targets failures to vet protocols or address known security risks.
- The recommendations will feed into an EU review, with a report to lawmakers due by June 30, 2027.
Table of Contents
DeFi access puts platform responsibilities in focus
Published on Wednesday, October 21, the recommendations form France’s joint response to a European Commission consultation on the Markets in Crypto-Assets Regulation, known as MiCA.
France’s Treasury, the Financial Markets Authority, the central bank and the Prudential Supervision and Resolution Authority submitted the response together. Their proposed approach would extend investor safeguards by placing new obligations on regulated platforms that connect clients to DeFi protocols.
The proposed liability is conditional: it concerns certain incidents affecting customers where a platform actively facilitated access and failed to assess protocols or ignored known security risks. It is not presented as blanket responsibility for every DeFi loss.
An EU review, not an enacted change
MiCA currently excludes crypto services provided in a fully decentralized manner without intermediaries. France’s proposal focuses instead on the role of regulated intermediaries offering customers a route into those services.
The European Commission is examining whether the regulation needs updating as crypto markets develop. Its consultation sought feedback on activities beyond the law’s original scope, including DeFi.
Responses will inform a report to EU lawmakers due by June 30, 2027. That report could contain proposals to amend MiCA; the French recommendations do not themselves establish new liability rules.
Conclusion
France’s proposal would place greater responsibility on regulated platforms that facilitate DeFi access. Whether those duties become law remains subject to the EU review and any subsequent legislative proposals.
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