Initial Coin Offering regulation in France

A “first generation” FinTech development in the ‘crypto’ domain, Initial Coin offerings (ICOs), are a novel way of raising seed capital for technological SMEs and start-ups, where issuers seeking to raise capital issue crypto-assets utilizing distributed ledger technology. At the crossroads of an Initial Public Offering (IPO) and crowdfunding, ICOs have gained increasing public attention since 2017, enabling to raise disintermediated early-stage capital through the public sale of tokens over online websites and platforms than venture capital. Despite its meteoric rise to popularity, ICOs pose thorny regulatory problems, being associated with scams, bubbles, Ponzi schemes and money laundering (Brummer, 2019). However, in contrast to some jurisdictions who have banned ICOs altogether (China) and others who have opted to include them in a pre-existing framework (Japan and the US), France, a jurisdiction known for its relatively ‘conservative’ regulatory bias, has proactively sought to be at the forefront of ICOs creating the world’s first comprehensive, light touch framework for crypto-asset intermediaries and ICOs issuers (Loi PACTE). This paper investigates this empirical puzzle, through extensive qualitative data collected through primary and secondary documents as well as semi-structured interviews with financial regulators, market participants and politicians in France. Given the far-reaching and interconnected nature of debates over crypto assets, this chapter also offers a more holistic understanding of French regulatory approaches to the emergence of crypto assets (Bitcoin, Ethereum, etc.) and the issuance of securities utilizing blockchain technology.

Daphnée Papiasse is a PhD candidate at the LSE with a focus on the regulation of financial technological innovation in France, with an empirical focus on crowdfunding and crypto-asset regulation. Specifically, her research analyses the post-GFC politics of financial technological innovation in France. Daphnée is equally more broadly interested in the variety of approaches to financial technological innovation within the European and global contexts.

Beyond her PhD studies, Daphnée is a research student of the LSE’s Centre for Analysis of Risk and Regulation and a Research Associate at the Cambridge Centre for Alternative Finance (CCAF). She has equally been a content designer for the LSE’s Risk and Crisis Management online certificate course and a graduate teaching assistant for the PP488 Executive Regulatory Analysis Course.

Prior to her PhD studies, Daphnée obtained her masters’ degree from the London School of Economics (European Politics & Theory and History of International Relations), la Sorbonne University (European Affairs & Law), and her bachelor’s degree from the Catholic Institute of Paris (Economic and Social Sciences).

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