The French Legal Recognition of the BlockChain - A Method of Issuing Dematerialized Securities 1/2

By FrenchLegalAspect | FLA | 19 May 2020

This is a translation of legal researches about crypto-assets and other currencies i have made few years ago. Think it's interesting to see how each country react about development of that technology.

It will be cut in two parts as my other posts to be easier to read in regards of their lenght.

Hope you will enjoy the reading.



Once this element common to all crypto-actives has been explained, i.e. acceptance as a means of payment, the elements of distinction between crypto-actives should be addressed. This exercise makes it possible to divide crypto-actives into categories according to the conditions under which they were made (conditions which are computer-transcribed within the blockchain). For the moment, cryptocurrencies are all derivatives of Ethereum and Bitcoin, whose distinction is the possibility of consuming the units through other "smart-contracts" based on the same technology for Ethereum.

Announcement - Other forms of assets using this technology have emerged with a different purpose from monetary issuance, justifying a broad recognition of crypto-assets. This concept takes account of the diversity of possible uses of tokens by focusing on the nature of the right incorporated in the cryptographic asset. Thus there are titles invented in blockchain (I.), whose framework presents difficulties, and existing titles transposed in blockchain (II.), for which an adapted transposition of the regime seems appropriate.


Announcement - The first type of cryptographic assets, these do not come close to any transposable legal category. These are monetary crypto-assets (A.), and the other forms of crypto-assets, which will be grouped together as commercial crypto-assets (B.).


Monetary tokens - Also called payment tokens, they have no other use than as currency or the value it represents. At the origin of all the other crypto-actives, monetary tokens are "cryptomoney" in its usual sense, falling within the category of crypto-actives, a nomenclature used by the Banque de France. Monetary tokens are issued in return for the operation of the decentralised money network, and not in return for financing. Most of the crypto-assets in circulation are monetary tokens, i.e. crypto-assets whose original function is solely that of payment between the members of the network. The only difference between the two is that the latter allows an ICO based on its protocol to issue new tokens, whereas the former, if it can be duplicated (Litecoin is for example a clone of the Bitcoin protocol, with some adjustments to the modalities: for example, the maximum number of Bitcoin and 21 million versus 84 for Litecoin) can only be used as a means of payment by being transferred for this purpose.

This difference is important from a legal point of view since Ethereum would then be a consumable unit, not Bitcoin. Non-consumable tokens, such as Bitcoin, appear to be used more for speculative purposes in the hope that the price will rise due to their rarity[1]. However, for some things (e.g., currency), their disposal is considered consumption, and the disposal of "tokens" could be considered consumption, making them consumable things[2].

The provision of a "manifesto" - What distinguishes monetary tokens from commercial tokens issued by ICOs is the nature of the founding document of the activity: Manifestos, which aim to announce a protocol on which certain types of technological projects (originally Bitcoin) could be developed, and white-paper, which are more commercial in nature and are aimed at a target group of buyers by describing, with varying degrees of detail, "the business project, the characteristics of the tokens issued, the planned use of the fundraising, the economic projections and the use of the funds raised over a more or less long-term period"[3]. As the two crypto-assets do not have the same objective (one having a monetary purpose, the other a means of financing), it is logical that the documents provided, and even their characteristics, should be distinct. The first cryptomony, and most of the crypto-actives with a monetary purpose, appeared accompanied by a "manifesto" from its creator who took the trouble to explain how it worked[4]. A manifesto puts on a new legal ground, but does not seem to be forbidden[5]. Other types of cryptomoney exist, of which only the knowledge of the computer code or the trust in its creator allows to be certain of the characteristics of each crypto-active. It should also be noted that some initiators mention various technical information relating to the ICO operation that they plan to launch in a document called "terms & conditions", distinct from the "white paper".

Lack of identity of the issuers of monetary tokens - Cryptometers are issued in exchange for participation in the "peer-to-peer network". Thus, the CJEU considers that cryptomonnages are non-legal means of payment[6]. They are accepted as a means of payment within the network must therefore be of this nature and, by incorporating this function as a form of currency, they become part of the character of money. Nevertheless, while private currencies are issued by a person independent of the state, cryptomonnages are not issued by anyone. The issuance of cryptomoney is determined by the creator who has registered the operation of the issuance process by computer. Once created, the cryptomony follows its rules without its creator being able to intervene on the issued units. Only the participation of almost all the members of the network can modify this computer protocol, a rare but existing hypothesis, mainly for technical adjustments (security and network performance).  The solutions adopted for the supervision of MLCs concern issuing institutions and are therefore inadequate when transposed to monetary tokens. As commercial tokens are issued to specific persons, a separate regime is relevant but requires an understanding of the functioning of each type of crypto-active.

While it is salutary to create a category of crypto-actives which takes account of the specific features of cryptographic technology, it is also necessary to differentiate between them since they may pursue very different objectives, if only between monetary and commercial issuance. In this respect, a classification between three types of tokens, as in Switzerland, rather than two, would have been more relevant, since otherwise these monetary crypto-actives would be treated in the same way as commercial crypto-actives.


Part of the doctrine[7] has proposed that the tokens issued by ICO should be considered as miscellaneous property within the meaning of the Monetary and Financial Code when dealing with brokers in miscellaneous property[8]. While the nature of intangible movable property is not in doubt, it does not shed any additional light on the nature of crypto-assets. However, although it has often been dismissed on the grounds that the regime only applies to ISPs, the AMF[9] has not upheld the complaint and seems to be appropriate for the issuance of certain crypto-assets, sometimes referred to as "commercial crypto-assets"[10].

Use tokens - Use tokens, unlike voting or financial tokens, give the holder a right of use by allowing them to use the technology and/or services distributed by the ICO promoter. This type of token issue, known as "use" tokens, allows issuers to address both the financiers of their business project and also customers wishing to use the services they wish to develop[11]. This type of financing falls between participatory financing and the "captive marketing" methods used by certain brands that develop a customer attachment to the economic usefulness of their product and/or service. Some "tokens" are thus intended to serve as payment assets within the project to be financed, while others are only intended to be resold on the secondary market, or else to incorporate financial rights into the project (particularly in pre-sales operations, where the first tokens are issued to a small number of participants and then offered to the public without any particular right). Therefore, commercial crypto-assets can have various characteristics.

The provision of a "white paper" - Potential investors are approached via a "white paper", a document presenting the project to be financed (a few examples of these application projects: Augur, a software allowing each person to "bet" on the realization of an event in order to eventually create a collective intelligence;, a software allowing the control of intelligent objects by "smart contracts" recorded on the blockchain)[12], most often related to blockchain technology[13].

A miscellaneous property characterization - This characterization does not provide a regime or even a property test since the miscellaneous property regime is intended to provide a regime for financial property intermediaries[14]. Thus, it is a regulation specific to financial property intermediaries, almost residual. This unclassifiable nature can be seen in crypto-assets without shedding any new light on their nature. However, the point of this analysis is to transpose a regime for controlling the activities of operators operating on the market in crypto-assets. While this is commendable, since it would regulate more specifically the exchange and service platforms in this sector, this prism does not allow us to give an opinion on the nature of cryptomoney other than to prefer a "catch-all" financial qualification rather than a particular form of currency. However, it is not unreasonable to see tokens, both monetary and commercial, as a miscellaneous good, in the absence of a definition of such goods[15]. Moreover, the miscellaneous property intermediary regime would allow for the imposition of obligations on intermediaries in the cryptomoney market. However, the absence of a definition of goods and a qualification seems to circumvent the payment function of cryptomoney. The recognition of the "blockchain" within the Monetary and Financial Code seems to take this diverse nature into account, suggesting the drafting of a functional regulation of cryptographic assets according to their nature[16]. This method, not without recalling the functional nature of the concept of money, seems the most relevant to provide a solution specific to each use.

Timely nature to issuers of "tokens" of use and no function - If the assumption had been raised that the financial and broad nature of the miscellaneous property category suffered little impediment. The AMF has ruled out these obstacles[17]. It appears that the fact that the holder of the ICO project is also the issuer of the tokens is not an obstacle to the classification of BID, contrary to what had been put forward by part of the doctrine[18]. It had been pointed out that an initiator of an ICO did not necessarily operate on a regular basis, which is a necessary condition for the application of the scheme. However, the condition seems to be met by all ICOs since this expression means that the proposal is made to several persons at the same time. Moreover, some cryptographic assets seem to have no particular function, so that it would be necessary to include them in the regulation of brokers of various goods. Indeed, recently, new applications using the "blockchain" have been developed. A number of networked games have been created that accept only cryptomonias as a means of payment in order to purchase items within the application. These items, which are also cryptographic assets since they are based on blockchain technology, are however very different from the cryptomonnages used to purchase them: issued by a specific person, they are more similar to tokens issued during an ICO. However, while the usefulness of tokens is not in doubt, since in principle they give specific rights to their holders, the usefulness of this type of asset is more difficult to determine[19]. As simple digital currencies, these residual crypto-assets should then be placed, for want of a better solution, under the regime of miscellaneous assets that would make it possible to supervise the issuers and intermediaries intervening in this type of crypto-assets.

With regard to the application of the miscellaneous property regime, it appears that the regime is not fully applicable to tokens with regard to the mode of issuance, but seems to be the most appropriate category in positive law. In the absence of anything better, monetary tokens will also be subject to the miscellaneous goods regime, while platforms offering crypto-active exchange will be subject to the status of payment service provider.




[1] This is why some people argue that the increase in the price being irresistible, the issuance of cryptomoney would obey a pyramid or Ponzi scheme logic.

[2] L. Soleranski, « Réflexions sur la nature juridique des tokens », Bull. Joly Bourse, mai 2018, n° 117n0, p. 19, par. 10.

[3] AMF, « Synthèse des réponses à la consultation publique portant sur les Initial Coin Offering (ICO) et point d’étape sur le programme « UNICORN » », 22 févr. 2018, p. 3.

[4] To consult Bitcoin's "white paper", explaining how the "blockchain" works, and the purpose of using it as a decentralized currency: [].

[5] H. Causse, « Jetons et tokens créés par ICO : réalités fondamentales et pratiques de l’émission », Hebdo édition affaires n°548, 12 avr. 2018, p. 13, par. 32.

[6] CJUE 22 oct. 2015, aff. C-264/14, « Skatteverket c/ Hedqvist, Skatteverket c/ David Hedqvist ».

[7] S. Schiller, « La blockchain révolutionne les levées de fonds », éd. Actes prat. ing. sociétaire 2017, par. 2 ; D. Legeais, « L'ICO en trois questions », Semaine Juridique Entreprise et Affaires n° 1, 11 janv. 2018, par. 3.

[8] F. Drummond, « Bitcoin : du service financier au service d'investissement ? », Bull. Joly Bourse 2014, p. 249, par. 111.

[9] AMF, « Synthèse des réponses à la consultation publique portant sur les Initial Coin Offering (ICO) et point d’étape sur le programme « UNICORN » », 22 févr. 2018, pp. 9-11.

[10] H. Causse, « Jetons et tokens créés par ICO : réalités fondamentales et pratiques de l’émission », Hebdo édition affaires n°548, 12 avr. 2018, p. 13, par. 37.

[11] AMF, « Synthèse des réponses à la consultation publique portant sur les Initial Coin Offering (ICO) et point d’étape sur le programme « UNICORN » », 22 février 2018, p. 3.

[12] [].

[13] D. Legeais, « L'ICO en trois questions », Semaine Juridique Entreprise et Affaires n° 1, 11 janv. 2018, par. 3.

[14] Art. L550-1 et suiv., C. mon. fin.

[15] Banque de France, « L’émergence du bitcoin et autres crypto-actifs : enjeux, risques et perspectives », Focus n° 16, 5 mars 2018, pp. 9-11.

[16] Art. L223-12, C. mon. fin.

[17] Banque de France, « L’émergence du bitcoin et autres crypto-actifs : enjeux, risques et perspectives », Focus n° 16, 5 mars 2018, pp. 10-11.

[18] H. Causse, « Jetons et tokens créés par ICO : réalités fondamentales et pratiques de l’émission », Hebdo édition affaires n°548, 12 avr. 2018, p. 13, par. 50 : « l’initiateur d’une blockchain, s’il est connu, est un prestataire et non un intermédiaire rendant la législation sur les intermédiaires en bien divers sans application » ; « the initiator of a blockchain, if known, is a service provider and not an intermediary making the legislation on intermediaries of various kinds without application ».

[19] The existence and usefulness of these assets, the most important of which are cryptographically held virtual chats, remains a mystery except for access to a game and the hope of reselling the item at a higher price : [].

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