AMF Says “Stop”, the Court Says “Go” : A Crypto Startup’s Legal Saga During COVID.

BECTRA
Apr 12
4 min read

In a quiet corner of the Paris Court of Appeal’s Financial Division, a small crypto company (let’s call them BPS) decided not to back down.

Facing them ? The most feared financial authority in France — the markets regulator (aka "He-Who-Must-Not-Be-Named", though we all know who it is).

What sparked the clash? A simple email from the AMF sent just before Christmas (yes, seriously 😅), ordering BPS to shut down everything immediately. Why? Because they had failed to register as a Digital Asset Service Provider (DASP — formerly PSAN, now PSCA) under the French PACTE law. Effective date? December 19, 2020. Merry Christmas.

Legal Reminder

Under the PACTE law, any company operating in the crypto space in France must be registered as a DASP with the AMF. They were given 12 months from December 18, 2019, to comply. So, the deadline was December 18, 2020. Simple, right? Except… COVID happened. And a sneaky little ordinance from March 25, 2020, messed with many deadlines — but according to the AMF… not that one. Bam!

Why Did BPS Push Back (and Win)?

The startup argued:

They submitted their registration application on November 26, 2020 (a bit late... but still on time-ish).
They never got a response from the AMF (classic: urgent calls go to voicemail).
They risked bankruptcy within weeks if forced to shut down: €500,000 in monthly revenue, 10 jobs on the line.
The AMF skipped the legally required adversarial procedure (not cool, regulator).

The Legal Twist: Suspension Granted!

Boom 💥: The Court of Appeal approved a stay of execution. Why?

The AMF letter wasn’t just a friendly “FYI” — it was a binding and harmful legal decision.
The regulator bypassed the mandatory pre-warning procedure.
The COVID-related deadline suspension could have pushed the compliance date to March 30, 2021 (not Dec 18).
The startup faced imminent bankruptcy = clearly excessive consequences.

Outcome: The AMF’s decision was put on hold until a full ruling is issued.

The Takeaway: David Can Still Rattle Goliath (Especially with a Good Lawyer)

Between mandatory DASP registration (now PSCA), procedural slip-ups, and COVID disruptions, this ruling reminds us that even crypto startups deserve fair treatment. Sometimes, all it takes is a sharp argument, good timing… and a healthy dose of guts to win time — and legitimacy.

Stay of Execution: How to Hit “Pause” on the Regulator

Sure, “ignorance of the law is no excuse”… but the law must be clear, properly applied — and startups should at least be given time to breathe, right?

That’s exactly what Blockchain Process Security (aka BPS) argued before the Court of Appeal. Spoiler alert: It worked.

Under Article L.621-30 of France’s Monetary and Financial Code, a court may suspend a decision if it’s “likely to cause manifestly excessive consequences.” Translation: if it could ruin your company overnight — you get a timeout.

The AMF’s “Friendly Reminder” Wasn’t So Friendly…

On December 21, 2020, the AMF’s Secretary General issued Decision No. 2020004191, kindly — but firmly — instructing BPS to shut down as of December 19 (!). No official notice, no real warning — just a procedural speedrun.

But the Court wasn’t fooled: this wasn’t a mere reminder, it was a binding legal act. Case admissible.

A Procedural Cocktail of Errors

Like a pop-up ad you ignore, AMF skipped some key steps:

Legally, under Article L.621-13-5 of the Monetary and Financial Code, the AMF should have:

Sent a formal notice,
Given 8 days to respond,
Informed of potential sanctions for non-compliance.

None of that happened. BPS was told to shut down from one day to the next. And the Court didn’t like that.

On the calendar side, the AMF insisted on December 18 as the hard deadline. But BPS argued — with supporting legal references — that this date should have been pushed to March 30, 2021 due to COVID emergency ordinances. And the Court agreed this point was valid.

Business Impact: Far From Minor

BPS may not be a unicorn, but it’s still got numbers:

€500,000 monthly revenue,
€27,455 fixed monthly costs,
€76,355 cash in bank as of Nov 30 — which means just 4 weeks of breathing room.

Oh, and did we mention 10 direct jobs at stake?

If BPS had to shut down immediately, bankruptcy was guaranteed. That’s not just “manifestly excessive” — that’s full-on startup Armageddon.

Final Ruling: Suspension Granted !

🏛️ The Court ruled: until the main case is decided, the AMF’s order is suspended.

BPS can keep operating — mining, selling, storing, and most importantly, breathing — for now.

TL ; DR – What You Need to Remember:

Even a so-called “reminder” can be a binding, harmful legal decision.
COVID-era deadline extensions do matter, even in highly regulated sectors.
Adversarial procedures are mandatory — even for France’s top financial regulator.
Crypto startups, even small ones, deserve due process and can fight back — successfully.