Authorities in France are cracking down on cryptocurrencies after deciding cryptocurrency derivatives" fall under EU financial regulation.
The French financial markets authority Autorite des Marches Financiers (AMF) said financial products based on bitcoin and other cryptocurrencies such as futures, binary options and contracts for difference, should fall under the European Union's MIFID 2 derivatives regulation.
It's the first country in the EU to signal if and how regulation should apply to cryptocurrencies, though it does not go so far as to categorise cryptocurrencies themselves as a currency.
"A derivative with underlying cryptocurrency and unwinding by cash settlement is analysed as a financial contract. Therefore, the regulations applicable to the offering of financial instruments in France applies to derivatives on cryptocurrencies," the organisation concluded.
The decision also means firms offering crypto-derivatives will not be allowed to advertise the products online in France.
The move comes as cryptocurrencies face greater scrutiny with wild price swings and volatility but increasing interest from investors. MPs in the UK today launched an inquiry into digital currencies.
The price of bitcoin has fallen back below $10,000 having been closing in on $12,000 earlier in the week. The sell off also hit other cryptocurrencies with ethereum, ripple, bitcoin cash and litecoin also losing between four and seven per cent.