France proposes crypto platform liability for DeFi security risks

French financial authorities have proposed making regulated cryptocurrency-asset service providers (CASPs) liable for certain losses incurred by customers accessing decentralized finance (DeFi) protocols. The proposal, submitted as a joint response to the European Commission’s consultation on the Markets in Crypto-Assets Regulation (MiCA), aims to extend investor safeguards to the DeFi sector.

Under the recommendations from France’s Treasury, the Financial Markets Authority (AMF), Banque de France, and the Prudential Supervision and Resolution Authority (ACPR), platforms would be required to conduct security assessments of DeFi protocols before offering access and maintain ongoing monitoring for vulnerabilities and suspicious activity. The authorities argued that intermediaries should bear responsibility if they expose clients to known risks or fail to perform adequate due diligence.

The proposal suggests that while fully decentralized services without intermediaries remain outside the current scope, regulated platforms facilitating access should face new obligations. These requirements would scale based on the size of the provider, with significant CASPs facing the strictest duties. Additionally, the French authorities opposed mandatory certification for self-custody wallet developers, favoring a voluntary model for those offering advanced services.