AMF Ombudsman Report 2023 Highlights Over 60% Increase in Cryptocurrency Disputes

The ombudsman’s office at France’s Autorité des Marchés Financiers (AMF) has released its annual report for 2023, highlighting an increasing number of cases in real estate investment, crowdfunding and cryptocurrency companies compared to the previous year.

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The AMF Ombudsman, Marielle Cohen-Branche, reported receiving 1,922 cases compared to 1,900 in 2022. The report indicates a significant decline in eligible cases, leading to fewer solutions proposed by the Ombudsman. Nonetheless, the team managed to manage and close a considerable number of cases, reducing the backlog by almost 40%.

Specifically, 1,129 eligible cases were reported, compared to 1,341 in 2022. 2,060 cases were processed and closed, a decrease compared to 2,089 in 2022. This led to 826 proposed solutions, or a decrease of 18%.

Share savings plans represent 25% of total reports, continuing to represent the main source of litigation. Most of the problems resulted from delays in transferring plans between institutions. One notable case involved non-compliance with tax regulations due to multiple transfers.

Although no longer the main focus, employee savings plans still make up 18% of reported cases, with early release being the top complaint. Meanwhile, stock order disputes have declined significantly, a change attributed to fewer new investors and a reduced volume of securities trades.

In 2023, the economic climate has seen a sharp increase in disputes related to real estate investment trusts (SCPIs) and crowdfunding. SCPI disputes doubled to 86 cases, primarily involving delays in redemption requests and unit devaluation. Real estate fund-raising
cases also increased by 110%, making it necessary to distinguish between market downturn issues and platform-specific malfunctions.

Stablecoin issues

In comparison, the volatile cryptocurrency asset market and the increase in registered DASPs have led to a sharp increase in cryptocurrency-related complaints in 2022. The number of disputes jumped to 54, of which 17 were deemed eligible. Issues included issues with stablecoins and the practices of some market participants leveraging “reverse solicitation” to avoid AMF registration.

Last year, the Ombudsman’s proposals favored applicants in 54% of cases, with a high compliance rate of 95%. Among the closed cases, 202 recommendations led to financial proposals, for a total compensation of 864,519 euros.

Personal stock savings plans have been the biggest cause of controversy, accounting for a significant portion of referrals. Most of the issues related to delays in transferring PEAs between institutions. This recurring problem led the AMF board to form a working group to seek practical solutions.

The ombudsman’s office at France’s Autorité des Marchés Financiers (AMF) has released its annual report for 2023, highlighting an increasing number of cases in real estate investment, crowdfunding and cryptocurrency companies compared to the previous year.

The AMF Ombudsman, Marielle Cohen-Branche, reported receiving 1,922 cases compared to 1,900 in 2022. The report indicates a significant decline in eligible cases, leading to fewer solutions proposed by the Ombudsman. Nonetheless, the team managed to manage and close a considerable number of cases, reducing the backlog by almost 40%.

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Specifically, 1,129 eligible cases were reported, compared to 1,341 in 2022. 2,060 cases were processed and closed, a decrease compared to 2,089 in 2022. This led to 826 proposed solutions, or a decrease of 18%.

Share savings plans represent 25% of total reports, continuing to represent the main source of litigation. Most of the problems resulted from delays in transferring plans between institutions. One notable case involved non-compliance with tax regulations due to multiple transfers.

Although no longer the main focus, employee savings plans still make up 18% of reported cases, with early release being the top complaint. Meanwhile, stock order disputes have declined significantly, a change attributed to fewer new investors and a reduced volume of securities trades.

In 2023, the economic climate has seen a sharp increase in disputes related to real estate investment trusts (SCPIs) and crowdfunding. SCPI disputes doubled to 86 cases, primarily involving delays in redemption requests and unit devaluation. Real estate fund-raising
cases also increased by 110%, making it necessary to distinguish between market downturn issues and platform-specific malfunctions.

Stablecoin issues

In comparison, the volatile cryptocurrency asset market and the increase in registered DASPs have led to a sharp increase in cryptocurrency-related complaints in 2022. The number of disputes jumped to 54, of which 17 were deemed eligible. Issues included issues with stablecoins and the practices of some market participants leveraging “reverse solicitation” to avoid AMF registration.

Last year, the Ombudsman’s proposals favored applicants in 54% of cases, with a high compliance rate of 95%. Among the closed cases, 202 recommendations led to financial proposals, for a total compensation of 864,519 euros.

Personal stock savings plans have been the biggest cause of controversy, accounting for a significant portion of referrals. Most of the issues related to delays in transferring PEAs between institutions. This recurring problem led the AMF board to form a working group to seek practical solutions.

Source