France To Hold Crypto Platforms Liable For Security Failures
France is proposing to include the changes in the European Union's (EU) Markets in Crypto-Assets Regulation (MiCA).
The French government called for new responsibilities covering platforms that facilitate access to decentralized finance (DeFi) applications.
Under the proposal, crypto firms would have to assess the security of their DeFi protocols before making them available to customers and continue monitoring for vulnerabilities.
French authorities argue that crypto platforms should be held responsible when they expose customers to security risks or fail to conduct adequate checks.
The recommendations form part of the European Commission's ongoing review of the MiCA legislation.
A central part of France's proposal concerns the responsibilities of crypto exchanges and other regulated service providers that deal with the public.
France wants those businesses to conduct due diligence, including assessing smart contract security, operational vulnerabilities, and potential risks associated with their services.
The proposal is the latest effort by France to crackdown on the crypto sector and digital assets.
Facing a debt crisis, France's legislature recently approved a 31% capital gains tax on stablecoins as part of a broad overhaul of its treatment of digital assets.
It is not clear if France's proposal to hold crypto firms liable for security breaches will be included in the revised MiCA legislation.
Bitcoin (CRYPTO: $BTC) is trading at $83,500 U.S. on Oct. 21.
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