Macron Ambition For Crypto Hub May Break Upon Rock Of Regulation
President Macron of France sees the advantages that cryptocurrencies can bring to his country, and similar to the ambitions of the UK, he wants to make Paris a hub for crypto.
However, despite what Macron thinks, the reality for both the UK and France is that their regulators are being extremely tough on crypto, and proposed new rules to govern the fledgling asset class may not attract quite the investment and talent as may be hoped.
According to an article on Bloomberg, an example of regulators coming down on a hitherto successful crypto company is the French-based NFT fantasy football platform Sorare.
A Huge Success
Sorare has had undoubted success over the last couple of years as its fantasy football card collectibles have been backed by many football clubs and leagues across Europe and the rest of the world.
The collaboration of Softbank in 2021 probably helped to propel Sorare to new heights, as a Series B funding round raised $680 million, led by the Japanese multinational conglomerate. The raise helped to value Sorare at the time at $4.3 billion.
Regulators Ask Questions
However, the road has become far rockier for Sorare since the heady days of such a high valuation. Only one month after the huge raise, the NFT platform came under scrutiny from the UK Gambling Commission, which stated that it would investigate whether Sorare needed a gambling licence and therefore should register with the Commission.
This was followed by the Swiss Gespa watchdog, which put Sorare on a blacklist, and finally the French regulator has begun to ask questions of the NFT platform.
Sorare itself has always denied that its platform has anything to do with gambling, and has stated that it has always complied with requests for information from regulatory agencies.
Nevertheless, the article on Bloomberg states:
“Sorare’s arguments are unlikely to deter regulators. In France, if a game brings together a financial sacrifice, an offering to the public and the hope of reward then it counts as gambling. When cards change hands for six-figure sums in the hope of earning better tournament prizes or a higher resale value, that would seem to clearly fit the criteria, gambling experts say.”
France’s crypto hub dreams could founder on regulations that come under the guise of heavier oversight and the oft cited “more consumer protection” and the always referred to “money laundering” risks.
Nobody ever questions regulation, seeing it as 100% necessary in a world where consumers have to be protected. However, it often appears the regulation is only there to prevent the consumer doing exactly what they want with their money.
Existing regulation of the gambling industry won’t prevent anyone at all from losing everything they have in a casino, but perish the thought that consumers might want to invest in a collectible that might or might not go up in price.
It could be argued that the regulation that is about to be imposed upon the crypto industry by what could also be argued to be watchdog agencies that are representatives of the existing financial industry, will be heavy enough to totally suppress crypto innovation and will entail a huge cost to taxpayers.