DEVLHON Consulting Deciphers the ACPR 2023 Annual Report: Supervision of Crypto-Assets
The year 2023 marked a significant advancement in the supervision of crypto-assets, a rapidly growing sector that also carries numerous risks. The 2023 annual report of the Autorité de Contrôle Prudentiel et de Résolution (ACPR) highlights the efforts made to regulate this field, complementing the general framework for combating money laundering and terrorist financing (AML-CFT). DEVLHON Consulting analyzes the key initiatives and measures taken by the ACPR to ensure effective supervision of crypto-assets.
Regulatory Context in 2023
In 2023, the regulatory framework for crypto-assets was significantly overhauled with the introduction of the Markets in Crypto-Assets (MiCA) regulation. This regulation aims to harmonize the rules applicable to crypto-assets across the European Union, encompassing issuers, service providers, and investors. MiCA imposes strict requirements regarding transparency, consumer protection, and the fight against illicit activities.
Simultaneously, the Transfer of Funds Regulation (TFR) was updated to include specific provisions for crypto-asset transactions. This regulation ensures the traceability of electronic fund transfers, including crypto-assets, to prevent money laundering and terrorist financing.
ACPR Initiatives for Crypto-Asset Supervision
The ACPR implemented several key measures to strengthen the supervision of crypto-assets in 2023:
Registration and Monitoring of Digital Asset Service Providers (DASPs):
Since 2020, the ACPR has supervised DASPs to ensure their compliance with AML-CFT requirements. In 2023, the ACPR intensified its inspections, examining 14 DASPs to verify their adherence to current regulations.
European Collaboration and Coordination:
The ACPR actively participates in preparatory work for the creation of the European Anti-Money Laundering Authority (AMLA). This new authority will directly supervise the most high-risk financial institutions, including those involved in crypto-assets.
Preparation for MiCA Regulation Implementation:
In anticipation of the MiCA regulation’s application in 2024, the ACPR has started preparing for a smooth transition. This includes consultations with market participants to ensure proper understanding and application of the new rules.
Risk Analysis and Management:
The ACPR updated its sectoral risk analysis for AML-CFT to include market practice developments and new actors in the crypto-asset field. This analysis helps identify the most vulnerable sectors and target inspections effectively.
Challenges and Outlook
Supervising crypto-assets presents several challenges. The decentralized and pseudonymous nature of transactions complicates traceability and the detection of illicit activities. Additionally, the rapid innovation in this sector requires continuous adaptation of regulations and supervisory approaches.
Despite these challenges, the efforts of the ACPR and European regulators aim to create a safe and transparent environment for crypto-asset transactions. In the long term, these measures should help reduce associated risks and strengthen confidence in this emerging sector.
Conclusion
The year 2023 was crucial for the supervision of crypto-assets, with major advancements in the regulatory framework and the ACPR’s supervisory initiatives. By enhancing transparency requirements and intensifying inspections, the ACPR strives to prevent abuses and ensure the security and stability of the financial system in the face of the rise of crypto-assets. These efforts, detailed in the ACPR’s 2023 annual report, are essential for integrating crypto-assets into a robust and reliable financial framework.