France Threatens to Break EU Crypto Market as AMF Warns of “Atomic Weapon” Against MiCA

[Ben Graham]

France crypto industry is once again in the spotlight, as Reuters revealed that France is again positioning itself at the center of Europe’s crypto debate, signalling it may move to block companies licensed in other EU jurisdictions from operating domestically.

The regulatory warning, delivered Monday by Autorité des Marchés Financiers (AMF) chair Marie-Anne Barbat-Layani, underscores the deep fractures already emerging under the European Union’s landmark Markets in Crypto-Assets Regulation (MiCA).

MiCA, which formally took effect for service providers in December 2024, was billed as the world’s first comprehensive digital asset rulebook.

The framework allows crypto firms to obtain authorisation in one member state and “passport” their license across all 27 countries.

246 days since MiCA came into effect, the map is clear.

Ireland leads with 123 MiCA white papers.
Germany: 59
Liechtenstein: 36
Malta: 26
Netherlands: 21
France: 7
Spain: 3

246 days since MiCA went live and our map shows where crypto launches are taking… pic.twitter.com/1D7y8Wf30P

— STORM Partners (@STORM_Partners) September 2, 2025

However, since the roll out of the scheme, growth has been uneven across regulator jurisdictions, for example Ireland has so far received 17.5x the number of crypto passports as France.

For companies, the passporting mechanism was the prize, an efficient gateway into the bloc’s single market. For regulators like the AMF, however, the past nine months have exposed its fault lines.

European Crypto Companies Are Shopping Around For Weak Jurisdictions

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Barbat-Layani warned that companies are already “shopping around” for the weakest jurisdictions, securing lighter-touch licenses before expanding into larger markets such as France. “We do not exclude the possibility of refusing the EU passport,” she told Reuters, likening the option to an “atomic weapon” that could be deployed if supervisory gaps persist.

The comments come as France, Italy, and Austria jointly call for the European Securities and Markets Authority (ESMA) to assume direct oversight of major crypto firms.

In a joint paper, the three regulators argued that early MiCA implementation has revealed “major differences” in how national supervisors interpret and enforce the rules. Direct ESMA supervision, they contend, is essential to safeguard investors and ensure a level playing field.

That push follows stinging criticism of Malta’s licensing regime. In July, an ESMA peer review found that the Malta Financial Services Authority only “partially met expectations” when authorising a crypto provider, highlighting poor risk assessment and slow supervisory follow-up.

Furthermore, the report fuelled concerns that smaller jurisdictions could become regulatory gateways for firms seeking rapid EU access.

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Are There Other Reasons Crypto Firms Are Avoiding France?

The high-stakes regulatory debate unfolds against a tense backdrop in France’s own crypto ecosystem. In recent months, a string of violent kidnappings targeting crypto entrepreneurs and their families has rattled the industry. French police have linked at least half a dozen attempted abductions to ransom demands in digital assets, including incidents in which victims were mutilated to pressure relatives into paying millions.

Security experts warn that some of the new EU reporting requirements may inadvertently be making it easier for criminals to identify wealthy targets.

This dual pressure, regulatory fragmentation at the EU level, and mounting domestic security concerns, puts Paris in a difficult position as the summer season approaches.

The AMF has spent years courting blockchain startups, branding France as a jurisdiction with clarity and credibility, particularly after granting Binance’s French entity a license in 2022. But the warning shot over MiCA passports signals a shift from promotion to protection.

The stakes are high for investors and companies. If France unilaterally refuses to recognise licenses from other EU states, the single market promise underpinning MiCA could fracture before it fully takes hold.

But it’s important to understand the risk is not only reputational but structural: a divergence in EU supervision would undermine confidence at a moment when global capital is weighing whether Europe can provide a credible alternative to Trump’s America.

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