France Threatens to Block EU Crypto Licenses, Calls for Centralized ESMA Oversight

France's financial regulator, the Autorité des Marchés Financiers (AMF), has issued its strongest warning yet about regulatory gaps in Europe's crypto framework, stating it may move to block some firms licensed abroad from operating domestically. The AMF is concerned that crypto companies are "shopping" for lenient jurisdictions under the EU's new MiCA regime, which allows firms to obtain licenses in one member state and use them across the bloc.

Marie-Anne Barbat-Layani, president of the AMF, told Reuters that France could even consider challenging the validity of an EU passport granted by another member state, describing this option as an "atomic weapon" for the single market that remains a possibility held in reserve. This warning comes amid growing concerns about uneven enforcement standards across EU member states.

In a joint position paper published Monday, France joined Italy's Consob and Austria's FMA in calling for the European Securities and Markets Authority (ESMA) to take over direct supervision of major crypto firms. The regulators argued that direct EU-level oversight would provide more consistent investor protection and reduce opportunities for regulatory arbitrage.

The move follows an ESMA review of Malta's financial regulator, which faced criticism for insufficient due diligence when granting a license to one unnamed crypto company. Malta defended its record as an "early adopter" of digital asset rules, but the peer review committee found the MFSA only "partially met expectations" and recommended closer monitoring of authorization applications.

The three countries also called for stricter rules around non-EU activities, stronger cybersecurity supervision, and a reassessment of how new crypto token offerings are managed. These revisions are seen as necessary to close loopholes exposed during MiCA's early months of implementation.