France Urges EU to Hold Crypto Exchanges Liable for DeFi Incidents

French financial authorities proposed amendments to the European Union's Markets in Crypto-Assets Regulation (MiCA) on Wednesday, recommending that regulated cryptocurrency platforms face liability for decentralized finance (DeFi) security failures when they actively facilitate user access ¹. The joint recommendations were submitted to a European Commission consultation by the French Treasury, the Financial Markets Authority (AMF), the Banque de France, and the Prudential Supervision and Resolution Authority (ACPR) ¹.

Under MiCA's current framework, services operating in a fully decentralized manner without intermediaries remain outside regulatory scope ¹. The French proposal aims to bridge this gap by holding crypto-asset service providers (CASPs) responsible if they connect users to protocols without vetting code or after ignoring known security vulnerabilities ¹. Regulators argued that "CASPs should be liable for certain incidents affecting clients where they actively facilitated access" ¹. The framework suggests protocol and smart contract certifications, requiring platforms offering uncertified integrations to conduct internal due diligence and issue enhanced risk disclosures ¹. The rules would apply fully to significant CASPs, with obligations scaled for smaller entities ¹. For non-custodial wallet developers, the authorities opposed blanket certification mandates, backing voluntary verification only for wallets integrating advanced DeFi features ¹.

Wider Push for ESMA Oversight

Beyond DeFi interfaces, the authorities called for a broader centralization of EU market oversight, aligning with recent policy debates such as ESMA Proposes Sweeping MiCA Reforms to Target DeFi and Unregulated Stablecoins ¹. France recommended transferring direct supervision of significant CASPs from domestic regulators to the European Securities and Markets Authority (ESMA) ¹. To broaden this perimeter, authorities urged lowering MiCA's current threshold of 15 million average daily active EU users, suggesting that metrics such as assets under custody, corporate complexity, and operational risk also dictate ESMA's remit ¹.

Additionally, the proposal advocates overhauling stablecoin categories ¹. French regulators observed that zero asset-referenced tokens (ARTs) have received authorization under MiCA to date ¹. In response, they recommended adjusting the e-money token (EMT) regime to accommodate multicurrency stablecoins rather than maintaining the unused ART pathway ¹. The European Commission will use the consultation feedback to compile a report for EU lawmakers due by June 30, 2027, which may form the basis of formal legislative revisions ¹.