Introduced in January 2024 and rushed through parliamentary review, the bill aimed at “strengthening the fight against drug trafficking and related violence” has drawn significant attention in the digital ecosystem. While its stated goal is to curb the financing of drug trafficking, the proposed measures, if enacted as-is, could profoundly disrupt the legal treatment of crypto-assets in France.
A logic of criminalization by association
Article 5 of the bill significantly broadens the definition of money laundering. It would allow criminal prosecution for mere possession of crypto-assets deemed suspicious—particularly if users engage with unregistered platforms or cannot immediately prove the origin of their funds. This approach relies on a presumption of guilt based not on proven facts but on a context considered suspicious: incarceration in itself.
This raises serious constitutional concerns, notably regarding the presumption of innocence. It shifts the burden onto users to prove the legitimacy of their assets, which can be extremely complex in a decentralized or non-custodial environment. Activities such as staking, airdrops, or using DeFi rarely leave centralized traces.
By adopting a generalized presumption of suspicion, equating possession with participation, the bill jeopardizes the legal certainty for legitimate holders of digital assets. Such a climate of mistrust could slow innovation and erode confidence in the French ecosystem, exposing virtuous actors to ongoing legal insecurity disconnected from blockchain realities.
Extension of digital asset freezes
Another key measure expands the authorities’ power to immediately freeze digital assets, including those held in self-custodied wallets or with foreign providers. While such interventions exist for criminal investigations or international cooperation, this bill goes further. It would allow preemptive seizures on mere suspicion of a serious crime, sometimes without prior judicial approval.
This administrative freeze raises major legal questions. It challenges the principle of proportionality, especially when assets seized are not directly linked to an offense or belong to innocent third parties. It also raises territoriality issues: some providers operate outside France, in non-cooperative jurisdictions, and assets may be spread across public or interoperable blockchains.
Such a provision directly affects property rights, protected by the French Constitution and the European Convention on Human Rights. Without rigorous judicial oversight, the risk of arbitrariness or excessive decisions becomes very real in such a complex environment.
Indirect impact on French Web3 actors
Beyond seizures, the bill could indirectly penalize actors compliant with French law, such as PSANs registered with the AMF. Increased reporting obligations and tighter controls would add to an already strict regulatory framework, particularly concerning anti-money laundering and counter-terrorism financing.
Systematic reporting to TRACFIN of suspicious transactions and the increased risk of prosecution for non-compliance would impose heavy operational burdens on smaller structures. This pressure could discourage new entrants.
Ambiguities in certain clauses—such as the scope of detection systems or the definition of “risky” behavior—create legal uncertainty harmful to innovation. DeFi projects, DAO communities, or NFT platforms might avoid France in favor of jurisdictions perceived as more stable or accommodating, potentially weakening France’s attractiveness in Web3 technologies.
Generalized suspicion fuels stereotypes
The bill treats cryptocurrencies as intrinsically suspicious tools used to bypass laws and finance illegal activities, ignoring their neutral nature recognized by French and European courts when used legally.
It overlooks the many initiatives Web3 actors have implemented to ensure transparency, automated compliance, and cooperation with authorities. The law promotes an alarmist, caricatured narrative, disconnected from the economic and technological realities of the sector.
Technically, blockchain analysis tools (transaction tracking, public ledgers, risk assessments) often exceed traditional finance capabilities. Yet the law imposes a stricter framework on crypto without recognizing these advances or distinguishing promising uses from marginal abuses.
Most organized crime-related transactions still pass through traditional banking channels—shell companies, international transfers, opaque structures. While crypto makes headlines, its real share in global money laundering remains marginal.
Thus, the bill risks stigmatizing developers, investors, companies, and registered service providers, exposing them to chronic legal instability imposed by vague, excessive measures disconnected from practical compliance realities.
Potential constitutional challenges
Several provisions could face scrutiny by the Constitutional Council, including reversal of the burden of proof, administrative freezing without prior judicial approval, and presumption of guilt for crypto-asset holders.
These measures could be deemed contrary to the presumption of innocence (Article 9 of the Declaration of Human and Civic Rights), freedom to conduct business, or property rights. Without sufficient safeguards, their application could be invalidated, especially as their effectiveness in combating drug trafficking remains unproven.
Conclusion
While combating drug trafficking is a legitimate and necessary goal, the so-called “drug trafficking law” raises serious concerns for the future of digital assets in France. By too quickly equating crypto-assets with criminal instruments and disproportionately expanding investigative, freezing, and sanctioning powers, the law risks undermining fundamental legal principles and stifling technological innovation.
It is urgent to strengthen the legal framework for crypto-assets, but not on the basis of a generalized presumption of guilt. A rational dialogue among legislators, regulators, and industry professionals is essential to prevent an anti-drug law from becoming, as a side effect, an anti-crypto law.
