Following an analysis of the legal categorisation of cryptocurrency derivatives and the recent boom of online platforms offering binary options, CFDs and Forex with an end-of-day maturity, the Autorité des Marchés Financiers (AMF) has issued a (French-only) report concluding that platforms which offer such products must comply with the authorisation and business conduct rules, and that these products must not be advertised via electronic means.

Over the past few months, the cryptocurrency boom has encouraged several online trading platforms to offer cryptocurrency binary options, CFDs or Forex contracts with an end-of-day maturity (rolling spot forex). Such contracts allow investors to bet on a cryptocurrency’s rise or fall without holding the underlying. The AMF’s analysis of cryptocurrency derivatives looks at the legal categorisation of the notion of a 'derivative' in the context of cryptocurrency derivatives and whether a cryptocurrency could legally be an eligible underlying for the purposes of the definition of MiFID instruments.

The AMF has concluded that a cash-settled cryptocurrency contract may qualify as a derivative, irrespective of the legal categorisation of a cryptocurrency. As a result, online platforms which offer cryptocurrency derivatives fall within the scope of MiFID2 and must therefore comply with the authorisation, conduct of business, and the EMIR trade reporting obligations. In particular, the reports note that the products are subject to the provisions of the French “Sapin 2” law, and, notably, the ban of advertisements for certain financial contracts.

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