France Wants Crypto Platforms to Face Liability for DeFi Failures

France proposes new MiCA rules that could hold crypto platforms responsible for DeFi security failures and strengthen protection for European investors.

France wants cryptocurrency platforms to take greater responsibility for security failures linked to decentralized finance (DeFi). Under the proposal, Platforms may be liable if they fail to take precautions to avoid known hazards or verify protocols before granting access.

The proposal is from 4 French authorities who are collaborating on EU crypto rules. They seek enhanced investor protection and foster innovation and competition in Europe’s financial sector.

France Proposes Stricter Security Checks for Crypto Platforms

On October 21, 2026, the French Financial Markets Authority (AMF), French Treasury, the Banque de France, and the ACPR released their proposals together. They are responding to the European Commission’s review of the Markets in Crypto-Assets Regulation (MiCA).

For now, MiCA does not treat fully decentralized peer-to-peer protocols as part of the main rules. However, France wants stronger requirements for regulated companies that connect customers with DeFi services.

The companies are called crypto-asset service providers (CASPs). They feature regulated platforms that enable customers to access cryptocurrency services.

The proposal would make CASPs liable for some customer losses. This may occur when platforms do not address known security issues or when they don’t adequately verify protocols.

Furthermore, France wishes these platforms to audit smart contracts prior to providing DeFi access. Smart contracts are computer programs that execute actions when certain conditions are fulfilled.

Platforms would also have to check technical flaws and track suspicious blockchain activity. As a result, these checks could be useful in detecting security issues before they result in significant losses.

France has also instituted a formal DeFi protocol and smart contract certification system. Certification would help show whether a protocol meets certain security standards.

But platforms might still provide uncertified protocols under certain circumstances. They would require independent security surveillance and more warning of potential hazards.

France Pushes Wider Changes to EU Crypto Rules

The French proposal also differentiates between big crypto companies and smaller businesses. The proposed rules would be more stringent for significant CASPs and less stringent for smaller companies.

Such a strategy may be useful for smaller companies to control compliance expenses and protect investors. However, the specifics of the requirements would depend on the final regulations European legislators adopt.

France also aims to defend the developers of standard self-custody wallets. Unlike centralized wallets, these wallets give users the ability to manage their own cryptocurrency without the need to trust a company to store it.

The proposal would exempt ordinary self-custody wallets from automatic certification requirements. However, advanced wallets with deeper DeFi features could have access to voluntary certification programs.

The European Commission is considering the need for changes to MiCA to cover gaps related to DeFi meanwhile. France’s plans will be part of a broader assessment of cryptocurrency regulations.

The Commission will submit a report to EU lawmakers by June 30, 2027. The results may have implications for crypto companies in the entire 27-member EU bloc.

In addition to the DeFi security, France also aims to reduce the threshold for determining the significance of CASPs. The current threshold is 15 million DAUs.

French officials also back the move to shift the regulatory control of these big firms from national regulators to the European Securities and Markets Authority (ESMA). This change may lead to a more uniform policy in Europe.