French financial regulatory officials have warned that the country may block certain cryptocurrency companies licensed in other EU member states from operating within France, as part of efforts to transfer cryptocurrency oversight to the EU's central securities regulator.

Marie-Anne Barbat-Layani, Chairman of France's financial markets regulator, the Autorité des Marchés Financiers (AMF), stated that the agency is concerned that under the EU's new regulatory framework, cryptocurrency companies are deliberately seeking jurisdictions with more lenient licensing standards.

The Markets in Crypto-Assets (MiCA) regulation, a landmark set of digital asset rules that took effect this year, allows cryptocurrency companies to apply for licenses from any EU member state, with approved licenses serving as a "passport" for conducting business across all 27 EU countries.

Since the law's implementation, inconsistencies in rule enforcement among national regulators have become apparent, raising questions about whether some licenses are being issued too hastily and whether cross-border operating cryptocurrency companies are adequately supervised.

**Regulatory Gaps Spark Concerns**

The focus centers on regulating the trillion-dollar cryptocurrency industry. Global regulators have long warned that inadequate oversight could destabilize markets and harm investor interests.

On September 15 (Monday), France joined Italy and Austria in calling for the European Securities and Markets Authority (ESMA), based in Paris, to assume regulatory oversight of major cryptocurrency companies, according to a position paper obtained by sources.

The AMF issued its strongest warning to date, stating that France does not rule out using "ultimate measures" to challenge the cross-border passport eligibility of cryptocurrency licenses issued by other EU member states.

The cross-border passport is a hallmark of the EU's single financial services market, allowing companies authorized in one member state to operate throughout the entire EU. However, the AMF did not disclose which companies' licenses might be challenged or the basis for such challenges.

"We do not rule out the possibility of refusing to recognize the cross-border passport validity of EU licenses," Barbat-Layani stated. "From a legal perspective, this approach is extremely complex and is not a positive signal for the single market - it's somewhat like an 'ultimate measure'... but it remains an option we reserve."

She added that cryptocurrency platforms are "jurisdiction shopping across Europe, trying to find regulatory loopholes to obtain licenses with requirements lower than other regions," though she provided no specific examples.

**Significant Differences Among National Regulators**

In the document released on September 15 (Monday), the AMF, Italy's Commissione Nazionale per le Società e la Borsa (Consob), and Austria's Financial Market Authority (FMA) jointly called on European legislators to establish a power transfer mechanism to move cryptocurrency regulatory authority to ESMA.

"The initial months of MiCA implementation have shown significant differences among national regulators in cryptocurrency market supervision," the three regulatory bodies stated.

They believe that direct implementation of regulation at the European level would better protect investors.

Earlier this year, Malta's financial regulator's licensing process came under scrutiny. An ESMA review found that Malta failed to adequately assess relevant risks when issuing a license to an unnamed cryptocurrency company. Malta responded by expressing pride in its role as an "early adopter" in digital asset regulation.

However, French, Italian, and Austrian regulators did not provide examples of which countries' regulators differ in rule interpretation.

Currently in a transition period, cryptocurrency companies are applying for licenses under MiCA. Luxembourg has issued a license to US-listed exchange Coinbase, while Malta has granted a license to Gemini, the exchange founded by the Winklevoss brothers.

France, Italy, and Austria also called for amendments to MiCA, including stricter rules for cryptocurrency companies' business activities outside the EU, enhanced cybersecurity oversight, and a review of how regulators manage the issuance of new cryptocurrency tokens.

France has long advocated for granting ESMA greater authority. ESMA Chairman Verena Ross has welcomed this initiative, though it faces opposition from some EU member states.