AMF Clarifies AML/CFT Regulations for Token Issuers
The French Financial Markets Authority (AMF) has issued clarifications on the main measures that token issuers must adopt to comply with anti-money laundering (AML) and combating the financing of terrorism (CFT) regulations.
Compliance Obligations for Token Issuers
According to Article L. 561-2 et seq. of the Monetary and Financial Code, token issuers are required to implement certain provisions aimed at preventing money laundering and financing terrorism. The AMF will pay particular attention to several key points during its investigation of approval applications.
Risk Classification System
Token issuers must establish a risk classification system that determines the risk profile of each subscriber and the level of vigilance measures required. This includes:
- Implementing identification and verification procedures for subscribers, regardless of the amount subscribed.
- For natural persons: gathering identity information such as name, date and place of birth.
- For legal entities: providing their legal form, name, registration number, and head office address.
Identity Checks
Identity checks must also be performed, which may involve:
- Obtaining written documents
- Using electronic identification means certified by the French National Agency for the Security of Information Systems (ANSSI)
- Two additional measures from Article R. 561-5-2 of the Monetary and Financial Code
Source of Funds Investigation
Token issuers must establish a procedure to obtain information about the source of funds in cases where subscriptions are unusually large or lack economic justification.
Internal Organization and Control System
Internal organizations must be established within the firm, comprising:
- Procedures for determining the profile of relationships with subscribers
- Management of identified risks
- An internal control system to ensure the orderly functioning of these procedures throughout the offer period
Outsourcing Due Diligence
Token issuers may choose to entrust external service providers with performing due diligence on their behalf, but remain responsible for complying with their obligations.
Tracfin Reporting and Information Obligations
Token issuers are subject to:
- Tracfin reporting and information obligations listed in Articles L. 561-15 et seq. of the Monetary and Financial Code
- Appointing a Tracfin reporter in their organization for this purpose
By implementing these measures, token issuers can ensure compliance with AML/CFT regulations and avoid potential legal consequences.