In France, the financial markets authority AMF has released its Annual Report for 2018. The publication highlighted the praiseworthy effects of the Sapin 2 law. This law made an attempt to eradicate the sales of very risky online trading products like binary options and high-leverage CFDs. The publication also discussed the increasing risks linked to cryptocurrencies.
From the first quarter of 2018, the AMF had initiated the compilation of its own ‘blacklist’ of websites that dabble into cryptocurrency investments. But in all, the French regulatory agency has issued its note of caution to the general public against 118 entities or online platforms that it said to function without regulations.
However, it is not all gloom and doom; the AMF has also been able to identify some really good sides of the Sapin 2 law. In 2018, the total of ads that were for speculative products had reduced to 311. The figures show that this is a yearly average of 582 for the duration from 2014 to 2016. An overwhelming proportion of the ads put up for the online trading products in 2018 were duly registered and regulated. Just 51 ads went against the Sapin 2 law – they were a total of nine regulated entities that were considered regulated in Cyprus.
The French agency also got across to the financial markets regulator in Cyprus and shared this discovery with it, and it worked. This is because the concerned entities seemed to have followed the rules eventually.
A quick glance at the data from the report relating to the research done by AMF’s consumer contact center (called the Epargne Infor Service) revealed a lot. In 2018, 36% of the complaints sent in by customers and clients had to do with the criminal activities that were carried out online. But in 2016, similar criminal activities relating to investments in forex and binary options led to almost 4,000 complaints and those linked to crypto-assets led to just 18 inquiries. In 2018, the records displayed performance in the opposite direction. Just last year, 968 complaints related to FX and binary options, while more than 2,600 inquiries were linked to cryptocurrencies.
As the profiles of businesses in the crypto world are increasing, governments too are also reacting and evolving along the way. Just as there are very professional players in the industry, there are also some criminal elements who try to take advantage of all the loopholes and also game the system. It is primarily because of this that governments are empowering the regulatory agencies and that is why the agency saddled with this responsibility in France is taking it really seriously.
By regulating all the activities on the crypto platforms, shady deals are eradicated, and the investments of customers and clients are safeguarded from mischievous actors. As cryptocurrency is steadily becoming the currency of the future, there can be no better time to put in these regulations than now. At the end of it all, the ultimate beneficiary is the customer who is wise enough to trade the risk to dabble into crypto investments.