CACEIS Bank, the asset servicing division of Crédit Agricole and Santander, has successfully obtained a crypto custody license in France, as reported on the regulator’s website earlier this week.
This development comes at a crucial time as the DeFi industry grapples with vulnerabilities and the need for reliable insurance protocols. The rapid expansion of the DeFi sector has led to rushed security implementations and insufficient smart contract audits, resulting in a heightened risk of hacks and exploits.
CACEIS, which claims to be a European leader in asset servicing, offers a range of services from clearing and fund administration to middle office outsourcing for various clients, including asset managers, insurance companies, brokers, pensions, and real estate funds. As a crypto custodian, CACEIS will store users’ private keys, thereby enhancing security for institutional clients.
As of December 2021, CACEIS reportedly had 4.6 trillion euros ($5.06 trillion) in assets under custody, while assets under management stood at 2.4 trillion euros ($2.6 trillion).
The French stock market regulator, the Autorité des Marchés Financiers (AMF), mandates that companies planning to offer custody services must apply for registration. This requirement also extends to other crypto businesses, including digital assets trading platforms.
CACEIS’s timely registration allows it to evade the upcoming stricter regulations. A new set of rules for digital assets providers in France will be implemented in July, demanding firms to comply with stricter Anti-Money Laundering measures, such as ensuring customer funds are segregated, and providing more detailed disclosures about risks and conflicts of interest.
However, these new rules will not apply to CACEIS and the more than 60 crypto firms registered with the AMF. These companies will be governed by the European Union’s Markets in Crypto-Assets (MiCA) legislation that comes into effect next year.
Among the AMF-registered crypto companies is Binance, which has been under preliminary investigation since 2022 for reportedly failing to comply with Know Your Customer procedures and possibly engaging in money laundering activities, according to the Paris Prosecutor’s Office.
France has been tightening rules on crypto businesses in recent months. One of the most recent developments is a bill restricting local crypto companies from using influencer marketing. Penalties for failure to comply with the law include up to two years imprisonment and a 300,000 euro ($328,000) fine, with the possibility of an influencer ban as well.
