France proposes liability for crypto exchanges offering DeFi access

France wants cryptocurrency platforms to face liability for certain decentralized finance (DeFi) incidents if they fail to vet protocols or ignore known security risks.

French authorities published proposals Wednesday to revise the European Union’s Markets in Crypto-Assets Regulation (MiCA). 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).

“CASPs [crypto-asset service providers] should be liable for certain incidents affecting clients where they actively facilitated access,” French authorities said.

MiCA excludes crypto services provided in a fully decentralized manner without intermediaries. France’s proposal would extend investor safeguards by imposing new duties on regulated platforms that connect customers to DeFi protocols.

The Commission is reviewing whether MiCA needs updating as crypto markets develop. Its consultation sought 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 amend the law.

DeFi access could come with new obligations