France’s National Assembly’s Economics Committee voted in favor of a law that bans social media influencers from touting risky financial services, including cryptocurrencies.
The ban is part of Bill 790, which is an attempt by the French government to address the promotion of financial scams or unlicensed activity in the country by influencers on social media. The proposed law, which is yet to be approved by the Assembly and Senate, was proposed by Stéphane Vojetta of President Emmanuel Macron’s ruling Renaissance party and opposition socialist Arthur Delaporte.
The legislation also puts cryptocurrency in the same category as risky financial products, gambling, aesthetic surgery, and pharmaceuticals. According to the bill, violators of the new law will face up to two years in jail as well as a fine of €30,000. Those who found guilty will also lose access to their social media accounts.
The move is directly aimed at putting a stop to the worrying trend of high-risk investments and sometimes fraudulent schemes being touted to often inexperienced consumers. It comes a few weeks after a class action lawsuit was launched in France by 102 victims against a couple of French social media influencers for deliberately leading them to lose money on crypto trading.
Binance France and its global parent were also sued by fifteen investors who claim the cryptocurrency giant flouted local regulations with misleading commercial practices. The plaintiffs shared screenshots showing Binance’s marketing materials in French prior to registering its business with local regulators, including a Telegram channel dubbed “Binance French.”
Binance France is also facing charges for the sale of TerraUSD (USTC) and its sister cryptocurrency Terra (LUNC). The lawsuit lists the controversial algorithmic stablecoin and other tokens that it claims are securities Binance was selling in violation of law, and the buyers were not warned of the risks involved in their purchases.
Cryptocurrency firms will be obliged to get a fully-fledged license to operate in France as of January 2024 even before the upcoming EU regulations take effect.
At present, more than 60 crypto platforms are allowed to operate in the country without a full license until 2026, meaning they can provide their services with minimal checks. The new law would require firms to gain a full license from the Autorité des Marchés Financiers (AMF), starting in October.
