Obtaining a DASP License in France : Steps and Legal Foundations

In France, the PACTE Law (Action Plan for Business Growth and Transformation) introduced a regulatory framework for digital asset service providers, also known as PSAN (Prestataires de Services sur Actifs Numériques). This article will outline the steps required to obtain a PSAN license in France, with an emphasis on the legal foundations and relevant articles.

1/ Determine the type of PSAN services to be provided:

1. The service of conserving digital assets or accessing digital assets on behalf of third parties, if necessary in the form of private cryptographic keys, in order to hold, store and transfer digital assets;
2. The service of buying or selling cryptocurrencies in legal tender currency;
3. The service of exchanging cryptocurrencies for other cryptocurrencies;
4. The operation of a digital asset trading platform;
5. The following services:
   • The reception and transmission of orders on cryptocurrencies on behalf of third parties;
   • Portfolio management of cryptocurrencies on behalf of third parties;
   • Advice to subscribers of cryptocurrencies;
   • Underwriting of cryptocurrencies;
   • Secured placement of cryptocurrencies;
   • Unsecured placement of cryptocurrencies.

2/ Determine the type of PSAN license for your business:

There are two licenses: one is mandatory (PSAN registration or enregistrement PSAN) and the other one is optional (PSAN approval or agrément PSAN). This short presentation aims to clarify these differences and their implications for businesses operating in the cryptocurrency.

1. PSAN Registration (Mandatory):
   The PSAN registration is a mandatory requirement for all digital asset service providers operating in the cryptocurrency domain which provides one of the services mentioned in 1° to 4° of the list of services presented supra. The main objective of the PSAN registration is to ensure that all digital asset service providers adhere to strict anti-money laundering (AML) and counter-terrorist financing (CTF) regulations.
   
2. PSAN Approval (Optional):
   PSAN approval is an optional certification granted by the regulatory authority to digital asset service providers that demonstrate a higher level of compliance with regulatory standards.
   Obtaining PSAN approval can be beneficial for service providers, as it may enhance their reputation, instill trust in potential clients, and provide a competitive edge in the market.
   To obtain PSAN approval, service providers must comply with additional requirements, such as maintaining adequate capital, implementing robust internal controls, and ensuring the competency of key personnel. While not mandatory, obtaining PSAN approval can signal a commitment to high standards and may attract more business opportunities.

3/ Prepare the necessary documentation:

To apply for a PSAN license, you must prepare a comprehensive file that notably includes:

1. A detailed description of the planned services
2. A business plan and financial forecast
3. Information on the company’s management team, shareholders, and beneficial owners
4. A description of the internal control systems and procedures to ensure compliance with regulations, such as KYC (Know Your Customer) and AML (Anti-Money Laundering) requirements
5. A risk management plan
6. Proof of professional indemnity insurance or a comparable guarantee.

4/ Submit the application to the Autorité des marchés financiers (AMF):

The application for a PSAN license should be submitted to the AMF, the French financial markets regulator. The AMF will review the application and determine whether to grant the PSAN license based on the documentation provided and the applicant’s compliance with the legal and regulatory requirements.

The business must also be registered with the ACPR, the French Prudential Supervision and Resolution Authority. This step is essential to ensure the business complies with the anti-money laundering and counter-terrorism financing regulations.

After obtaining the PSAN license, the business must maintain compliance with the regulatory requirements, such as updating the AMF and ACPR on any significant changes to its activities, submitting periodic financial reports, and conducting regular audits of its internal control systems.

Conclusion:

Obtaining a PSAN license in France requires thorough preparation and a comprehensive understanding of the legal and regulatory requirements. By following the outlined steps and adhering to the relevant legal foundations, businesses can successfully apply for and maintain a PSAN license, allowing them to provide digital asset services in France. It is recommended to consult with legal and financial experts to ensure compliance with the French regulatory framework throughout the application process and ongoing operations.