The French Accounting Standards Authority (Autorité des Normes Comptables - ANC) – relevant authority enacting French accounting rules – has amended the ANC regulation No. 2014-03 of 5 June 2014 relating to the General Accounting Plan (plan comptable général - PCG) by a regulation No. 2018-07 of 10 December 2018 (the "regulation"). This regulation will enter into force after approval by the French Ministry for the Economy and its publication in the Official Journal (Journal Officiel).

This regulation defines the accounting framework applicable to the treatment of tokens in the context of fundraising in crypto-assets in order to secure transactions in an ICO, in parallel to the legal framework provided for in Article 26 of the draft bill known as the "Pacte Act"1. Tokens issued and held will be governed for accounting purposes by Section 9 of Chapter II, Title VI of Book II "Specific terms of application of general principles" of the PCG.

The ANC indicates that it will be necessary to analyze the token's characteristics on a case-by-case basis by referring to an information document, also called white paper which must be provided by the token issuer"2. Article 1 of the regulation, modifying Article 619-2 of the PCG, distinguishes two types of token offers:

1.  ICO tokens with characteristics of financial securities, financial contracts, or certificates of deposit will be governed by the existing accounting provisions of the PCG applicable to financial securities, financial futures, or certificates of deposit.

2.  Three situations are distinguished when ICO token offers do not have the characteristics of financial securities or certificates of deposit:

  • Tokens with the characteristics of a repayable debt, even temporarily, will be recorded as loans and similar debts;
  • Tokens representative of services remaining to be provided or goods remaining to be delivered will be recorded as deferred income;
  • Sums collected from tokens that do not create any explicit or implicit obligations vis-à-vis the token underwriters and holders, will be considered as definitely acquired by the issuer and recorded as income.

Consequently, issuers must ensure that the rights and obligations attached to the tokens are clearly defined before any ICO. It is also important for issuers and underwriters to distinguish between tokens in order to treat them according to the applicable accounting regime. This classification will also impact the tax treatment, which remains to be defined by French authorities.

1 The draft bill on business growth and transformation (PACTE) was voted on at first reading by the National Assembly on 9 October 2018, Assemblée Nationale,
2 Article 26 of the draft bill Pacte adding Article L. 552-4 in the Monetary and Financial Code (Code monétaire et financier - CMF) provides that "issuers must prepare a document aimed at giving any useful information to the public on the proposed offer and on the issuer"