French authorities released proposals Wednesday to revise the European Union's Markets in Crypto-Assets Regulation, known as MiCA. The proposals would impose liability on crypto-asset service providers (CASPs) for incidents within decentralized finance protocols if they fail to vet them or disregard known security risks. France's Treasury, Financial Markets Authority (AMF), central bank, and Prudential Supervision and Resolution Authority (ACPR) jointly submitted the response to a European Commission consultation.
Under the framework, regulated platforms that connect customers to DeFi protocols would assume liability "for certain incidents affecting clients where they actively facilitated access," according to French authorities. The proposals address a current gap in MiCA, which excludes crypto services provided in a fully decentralized manner without intermediaries.
CASPs would be required to vet DeFi protocols before offering customer access and monitor them continuously for vulnerabilities and suspicious activity. France also backed formal certification of both protocols and smart contracts, with platform liability for specific incidents.
The obligations would apply fully to significant CASPs, with requirements scaled proportionally for smaller providers. Platforms could still facilitate access to uncertified protocols if they conduct their own due diligence and provide enhanced risk disclosures to users.
On non-custodial wallets, French authorities opposed blanket certification requirements for developers. They favored a voluntary certification process for more advanced wallets that integrate directly with DeFi services.
France also backed transferring supervision of "significant CASPs" from national regulators to the European Securities and Markets Authority (ESMA). To support this shift, the authorities proposed lowering MiCA's current threshold for identifying significant CASPs—currently set at 15 million average daily active users within the EU. They suggested additional criteria should include custody asset volumes, inherent business risks, and platform group structure complexity.
Finally, France called for a review of MiCA's asset-referenced token category. No ARTs have been authorized under the existing framework to date.
