France Proposes Holding Crypto Exchanges Liable for Some DeFi Losses

France wants platforms to answer for DeFi access they provide

French authorities published proposals on Wednesday to revise the European Union's Markets in Crypto-Assets Regulation (MiCA), the EU's rulebook for crypto businesses.

The joint response to a European Commission consultation came from France's Treasury, the Financial Markets Authority (AMF), the central bank and the Prudential Supervision and Resolution Authority (ACPR). It argues that crypto platforms should face liability for certain decentralized finance (DeFi) incidents when they connect customers to those services.

DeFi refers to financial services run by software rather than a traditional company or intermediary. MiCA currently does not cover crypto services provided in a fully decentralized way without intermediaries, according to the source material.

Key points from the French proposal

• Platforms that actively give customers access to DeFi could be liable for certain incidents affecting those clients, the authorities said.


• Regulated platforms would have to vet DeFi protocols before offering access and monitor them for vulnerabilities and suspicious activity.


• France backed certification of protocols and smart contracts, with full requirements for significant crypto-asset service providers (CASPs) and scaled obligations for smaller ones.


• Platforms could still offer uncertified protocols if they run their own due diligence and give enhanced risk disclosures.


• France opposed blanket certification requirements for developers of non-custodial or self-custodial wallets, favoring voluntary certification for more advanced wallets that integrate DeFi services.

Wider changes France is seeking in MiCA

Beyond DeFi, France supported moving supervision of "significant CASPs" from national regulators to the European Securities and Markets Authority (ESMA). The authorities proposed lowering MiCA's current threshold of 15 million average daily active users in the EU for identifying significant CASPs, and said custody assets, business risks and group complexity should also be considered.

France also called for a review of MiCA's asset-referenced token (ART) category. ARTs are tokens designed to keep a stable value by referencing assets or a combination of assets. The authorities noted that no ARTs have been authorized under MiCA, and proposed adapting the e-money token (EMT) framework to cover multicurrency stablecoins.

Where the proposal fits in the EU process

The Commission is reviewing whether MiCA needs updating as crypto markets develop. Its consultation asked for 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 change the law.

What is confirmed

French authorities published the joint proposal on Wednesday. The proposal is a response to a European Commission consultation, not a change in law. MiCA does not currently cover fully decentralized services with no intermediary. No ARTs have been authorized under MiCA, according to the French authorities.

What is still unclear

The proposal is a recommendation from French authorities. The sources do not say whether the European Commission, EU lawmakers or other member states support it, or whether any part of it will become law. The exact liability rules, certification standards and revised thresholds are not settled.

Why this matters for crypto users

If adopted, the changes would affect regulated platforms that let customers reach DeFi, adding checks before access is offered and possible liability when things go wrong. Such rules could also change which platforms fall under EU-level supervision and how stablecoin and other token categories are treated.

What happens next

The consultation responses will feed into a report to EU lawmakers due by June 30, 2027. That report could include proposals to amend MiCA.

Sources

• Cointelegraph