French Firm Becomes Europe’s First Regulated Crypto Asset Manager Funded by an ICO
France has one of the toughest regulatory environments in Europe
and the world generally when it comes to finance and specifically cryptocurrency. The country has in recent times taken a few cursory steps toward becoming a hub of ICO activity, but strict enforcement of crypto regulations is the cost of doing business in a well-connected financial hub like Paris.
Napoleon Group Gets Green Light from AMF
Napoleon Group, which is backed by BNP Paribas bankers Jean-Charles Dudek and Stephane Ifrah, and private equity investor Arnaud Dartois, used the ICO funding model about 9 months ago to raise about 10 million euros by issuing around just almost 30 million NPX utility tokens, which are used for access to trading bots and quantitative strategies on the NapoleonX.ai platform. One only needs a single token to access the platform. According to the firm, they are the first to overcome all the regulatory hurdles in French law and acquired approval to offer managed cryptocurrency assets to institutional traders everywhere. This is big news for France and Europe more generally.
Individuals can already benefit from the quantitative strategies available on the napoleonx.ai platform for bitcoin and ether, as well as the main global stock market indices. The first investment vehicles are expected to be launched in the first half of 2019. The group consists of three entities: Napoleon Capital, Napoleon AM, and Napoleon Index, set to launch next year, which will be another first, in that it will be a Benchmark Regulated-registered blockchain index publisher and administrator, which means they are future-proofed for Eurozone regulations set to be fully enforced around the bend in 2020.
Regulation is important, whether those in the crypto space like it or not. Attracting real capital and institutional wealth has been a long process for the crypto space. People don’t want to transact in a market where they can be regulated out of existence at any minute, so regulations that are clearly defined put them back in their comfort zone. France is still outlining its whole crypto framework, but one thing that is clear is that those who profit from cryptocurrencies in France will be paying a flat tax like any other asset, which is, according to co-founder and COO Arnaud Dartois, “the maximum that could have been done in France. It’s not enough. It’s not competitive in regards to what is done in other countries, but it is the best we could hope for at this time.”
As they say in their most recent press release:
“The AMF’s decision validates the Napoleon Group’s approach from the outset: to comply with the strictest financial standards and to rely on regulation to meet the needs of institutional investors. The Group has always believed in the need to regulate the crypto and blockchain industry in order to accelerate its adoption and has participated in numerous meetings and workshops with both public and private players over the last quarters.”
Proof of Performance
Albert Bergonzo/Wikimedia Commons Napoleon has actively participated the development of the ICO-friendly regulations that France is working on, having discussed the regulatory environment at length with the powers that be for over a year, as Dartois explained to this reporter in
an interview Friday.
“Actually, we have been in touch with the French regulator AMF for over a year, and we have done some lobbying to explain to them the importance to be very proactive on crypto and blockchain, and the hold that France can have to lead it. […] Tokenization of assets will be the next big wave, and they have to give the ecosystem, the framework, to seize this opportunity. And they have done it in a quite nice way, meaning they don’t have a very fixed or constrained framework, but something that is very light – they have a very flexible approach to that. It is understood that this is a huge opportunity for France and they have done a nice job.”
Napoleon’s primary market will be institutional investors and traders who have money in France and would like to gain exposure to crypto markets. What they have done is not easily done, and the association with former BNB Paribas banker Jean-Charles Dudek likely didn’t hurt.
Next year, they intend to launch Napoleon Index, which which requires the latest European regulatory approval under the BMR directive. Dartois says the index product will “enable anyone to prove the performance of any benchmark calculated and administrated by Napoleon Index via a public blockchain.” The result is that users can confirmed that the value of any algorithm or index are legitimate, after a requisite period of obfuscation data. The firm calls this feature “proof of performance.” Napoleon Index is scheduled to launch next year after approval is finalized. Dartois said it is currently operational, but just hasn’t received full regulatory approval yet.
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