France Threatens EU Crypto Passporting Blockade in Regulatory Dispute

France has signaled its intention to restrict certain cryptocurrency firms licensed in other European Union (EU) member states from operating within its borders. This action is part of a broader initiative by France, Italy, and Austria to shift the supervisory oversight of significant crypto firms to the European Securities and Markets Authority (ESMA), the bloc's central securities regulator. The head of France's financial authority, the Autorité des marchés financiers (AMF), expressed concerns that under the EU's new Markets in Crypto-Assets (MiCA) regulations, crypto companies may engage in "regulatory shopping." This practice involves seeking jurisdictions with less stringent licensing requirements. The potential blockade specifically targets the EU's "passporting" mechanism, which permits companies authorized in one member state to conduct business throughout the entire bloc. The AMF president characterized challenging a firm's passport as a legally intricate "'atomic weapon'," but one that France is prepared to deploy.