France proposes liability rules for DeFi access platforms

French authorities have proposed making regulated cryptocurrency platforms responsible for certain customer-impacting security incidents when they facilitate access to decentralized finance protocols and fail to address risks. The recommendations were submitted to the European Commission as part of its review of the European Union’s Markets in Crypto-Assets Regulation, or MiCA, and are not binding law. The joint submission by the French Treasury, the Autorité des Marchés Financiers, Banque de France and the Prudential Supervision and Resolution Authority focuses on crypto-asset service providers that connect customers with DeFi applications. MiCA generally excludes services provided in a fully decentralized manner without intermediaries. France’s proposal would address regulated platforms’ role as gateways, rather than make them responsible for every incident across decentralized networks. Under the recommendations, platforms would assess protocols before offering access and monitor them for vulnerabilities and suspicious activity. Authorities also support certification arrangements for DeFi protocols and smart contracts. Platforms could still offer uncertified protocols if...