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French stock market regulator Autorite des Marches Financiers (AMF) released a statement Thursday, Feb. 22, that cryptocurrency derivatives must be regulated under the European Union’s new Jan. 2018 financial reforms.

As derivatives cannot be legally advertised electronically, the AMF also states that online advertisements for cryptocurrency derivatives are not permitted.

AMF refers to the new version of the Markets in Financial Instruments Directive (MiFID 2), whose framework lays out the derivatives that must be regulated, like options, futures, swaps or forwards, as well as a list of corresponding underlying assets.

The AMF began an inquiry into the legal definition of a cryptocurrency as both a derivative and an underlying asset after several online crypto trading platforms began offering binary options, contracts for difference (CFD), and Forex contracts where cryptocurrency was the underlying asset. Investors could bet on the outcome of a cryptocurrency without owning any of cryptocurrency itself.

Although cryptocurrency derivatives are not included in the MiFID 2 regulation list, the AMF statement has concluded that “a cash-settled cryptocurrency contract may qualify as a derivative, irrespective of the legal qualification of a cryptocurrency.”

Online trading platforms offering cryptocurrency derivatives must be regulated under MiFID2 and cleared under the European Market Infrastructure Regulation (EMIR). Cryptocurrency derivatives also fall under the jurisdiction of France’s anti-corruption Sapin 2 law, according to the AMF statement.

Bloomberg writes that companies Plus500 Ltd. and IG Group Holdings Plc. have offered such cryptocurrency derivatives. Kelsey Traynor, a spokesperson for Plus500, told Bloomberg that all of the firm’s CFDs are in accordance with the AMF’s framework.

In December 2017, France allowed fintech companies and banks to trade unlisted securities on Blockchain-based platforms as a way to promote France’s reputation as a fintech hub.

France’s Minister of the Economy Bruno Le Maire appointed Jean-Pierre Landau, or “Monsiour Bitcoin,” in January of this year to head a cryptocurrency task force aimed at preventing criminal activity with crypto.

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