France is pushing to make cryptocurrency platforms liable for certain decentralized finance (DeFi) incidents if they fail to vet protocols or ignore known security risks — a step that would extend the EU's crypto rulebook to DeFi activity accessed through regulated platforms.

French authorities published the proposals on Wednesday in a joint response to a European Commission consultation on revising the European Union's Markets in Crypto-Assets Regulation (MiCA), the bloc's framework for crypto-asset issuance and services. The submission was issued jointly by France's Treasury, the Financial Markets Authority (AMF), the central bank and the Prudential Supervision and Resolution Authority (ACPR).

"CASPs [crypto-asset service providers] should be liable for certain incidents affecting clients where they actively facilitated access," the authorities said.

MiCA currently excludes crypto services provided in a fully decentralized manner without intermediaries, leaving DeFi users outside the protections the law gives customers of regulated platforms. France's proposal would extend safeguards by imposing new duties on regulated platforms that connect customers to DeFi protocols, making those firms accountable gateways to the on-chain market.

The European Commission is reviewing whether MiCA needs updating as crypto markets develop. Its consultation sought views on activities falling outside the law's original scope, including DeFi. The responses will inform a report to EU lawmakers due by June 30, 2027, which could include proposals to amend the regulation. Any amendment would still have to be negotiated and adopted through the EU's legislative process; for now, France's paper represents one member state's position rather than agreed EU policy.

DeFi access could come with new obligations

Under the proposals, platforms would be required to vet DeFi protocols before offering access and to monitor them for vulnerabilities and suspicious activity. The authorities also backed certification of protocols and smart contracts, alongside platform liability for certain incidents.

The requirements would apply in full to significant CASPs, with obligations scaled for smaller providers. Platforms could still connect customers to uncertified protocols if they conduct their own due diligence and provide enhanced risk disclosures, the authorities said.

The response also addressed non-custodial and self-custodial wallets. The authorities opposed blanket certification requirements for wallet developers, favoring instead voluntary certification for more advanced wallets that integrate DeFi services.

France pushes for wider MiCA overhaul

Beyond DeFi, France backed plans to transfer supervision of "significant CASPs" from national regulators to the European Securities and Markets Authority (ESMA), the EU's securities markets regulator.

The authorities also proposed lowering MiCA's current threshold of 15 million average daily active users in the EU used to identify significant CASPs. They further suggested considering custody assets, business risks and group complexity when determining which platforms should fall under ESMA supervision.

France additionally called for a review of MiCA's asset-referenced token (ART) category, which covers tokens designed to maintain a stable value by referencing other assets or combinations of assets. The authorities noted that no ARTs had been authorized under MiCA and proposed adapting the e-money token (EMT) framework — which applies to tokens referencing a single official currency — to cover multicurrency stablecoins.