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French regulators want crypto exchanges to carry real legal liability for customer losses tied to DeFi protocols — and they’re pushing to reshape how Europe oversees the biggest platforms in the market.
Why It Matters
This proposal matters because it would shift a core responsibility question in crypto from users and protocols to the largest regulated intermediaries, potentially raising compliance standards across Europe. If regulators move in this direction, it could reshape how exchanges design access to DeFi, how much risk they are willing to intermediate, and how MiCA functions as the region’s main framework for market oversight.
The proposal landed Wednesday as part of a joint submission to a European Commission consultation on whether MiCA needs updating. Four French authorities signed off on it: the Treasury, the Financial Markets Authority, the central bank, and the Prudential Supervision and Resolution Authority. It’s a rare unified front, and the scope of what they’re asking for is pretty broad.
MiCA, as it currently stands, doesn’t touch fully decentralized services that operate without intermediaries. That’s the gap France wants to start closing.
DeFi Checks and Platform Liability
Here’s the core of what France is proposing: if a regulated platform actively connects customers to a DeFi protocol, it should vet that protocol first. Not just once. Ongoing monitoring for vulnerabilities and suspicious activity would also be required. And the French authorities want certification to apply to protocols and smart contracts as part of that framework.
The liability piece is direct. Crypto-asset service providers — CASPs — would be on the hook for certain incidents affecting clients when the platform actively facilitated access. So the act of connecting a customer to a protocol becomes legally relevant. It’s not enough to say the protocol was decentralized and therefore someone else’s problem.
Smaller providers won’t face the full weight of that. They’d get scaled obligations, though the response doesn’t spell out exactly how that scaling works in practice.
And platforms aren’t banned from routing customers to uncertified protocols. They can still do it — but only if they run their own due diligence and hand customers enhanced risk disclosures before they go in. That’s basically a carve-out that keeps access open while putting the compliance burden squarely on the platform.
Self-custody wallets get separate treatment. French authorities came out against blanket certification requirements for developers of non-custodial wallets. But they do support voluntary certification for more advanced wallets that integrate DeFi services. It’s a nuanced position — probably one of the more interesting lines in the whole document.
ESMA Oversight and the 15 Million User Threshold
France also pushed for a major supervisory shift. The proposal backs moving oversight of significant CASPs away from national regulators and up to the European Securities and Markets Authority. Right now, supervision stays at the national level. France wants the big players under ESMA’s watch instead.
MiCA currently sets the threshold for “significant” status at 15 million average daily active users in the EU. France thinks that’s too high. They want it lowered — and they want the criteria to go beyond a simple user count. Custody assets, business risks, and group complexity would all factor in under the French proposal.
That last part matters. A platform with fewer users but enormous custody assets or complex corporate structures could arguably pose more systemic risk than a larger but simpler operation. The response doesn’t name a specific replacement threshold, and it doesn’t set out proposed levels for the additional criteria. So there’s still a lot of detail missing.
ARTs, Stablecoins, and the Review Timeline
France also called for a review of MiCA’s asset-referenced token category. ARTs are tokens designed to hold a stable value by referencing one or more assets. Worth noting: none had been authorized under MiCA as of the submission. Zero. That’s a pretty clear sign something in the framework isn’t working.
For multicurrency stablecoins specifically, French authorities proposed adapting the e-money token framework as a route to bring those tokens under coverage. The response doesn’t detail what specific changes that would require.
The European Commission launched the consultation to gather views on crypto activities outside MiCA’s original scope, DeFi being the big one. Responses will feed into a report to EU lawmakers. That report is due by June 30, 2027, and it could include proposals to actually amend the regulation.
The proposed duties would apply in full to significant CASPs. Smaller providers would get scaled requirements. How providers get classified beyond France’s proposed changes to the significance criteria — that’s still unclear. The response doesn’t get into it.
What’s clear is that France wants regulated platforms to own their role in the DeFi chain. If you put a customer in front of a protocol, you’re part of what happens next.
Frequently Asked Questions
What DeFi checks does France propose for crypto platforms?
France wants platforms to vet DeFi protocols before providing access and monitor them on an ongoing basis for vulnerabilities and suspicious activity. Certification for protocols and smart contracts is also part of the proposal.
When is the EU report on MiCA due?
The European Commission’s report to EU lawmakers is due by June 30, 2027, and it could include proposals to amend MiCA.
Would crypto platforms be blocked from connecting users to uncertified DeFi protocols?
No. Under the French proposal, platforms can still route customers to uncertified protocols as long as they carry out their own due diligence and provide customers with enhanced risk disclosures.
