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Why are futures contracts on Binance banned in France?
Since the summer of 2022, French users have no longer been able to access futures on Binance . These perpetual futures contracts allow users to bet on the rise ( long ) or fall ( short ) of a cryptocurrency without having to directly own it. Unlike traditional futures contracts, they have no expiration date and operate using a funding rate mechanism .
Not owning the underlying asset means that the investor never actually holds the cryptocurrency in question. They simply trade a contract that tracks its price, thus avoiding the hassle of managing deposits and withdrawals. In return, this involves paying funding rates : these fees are paid between traders depending on whether the buy (long) or sell (short) position is in the majority, in order to align the price of the perpetual contract with that of the spot market.
The ban on futures trading in France is based on regulatory constraints and the high risks associated with leverage . To continue using these products, many traders are turning to decentralized such as Drift , dYdX , and Hyperliquid , accessible via a crypto wallet without a centralized intermediary.
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Reasons for the Binance futures ban in France
French regulatory framework and its impact on Binance Futures
Binance has come under scrutiny from several regulators worldwide, including French authorities , due to the marketing of financial products deemed complex, such as perpetual contracts. These investigations have not called into question all of its activities, but they have increased the vigilance of regulators, particularly the AMF (French Financial Markets Authority), regarding the distribution of leveraged derivatives to the general public.
Perpetual contracts, used on Binance Futures, differ from traditional futures contracts in that they lack an expiry date. This characteristic places them in a legal gray area : should they be treated as simple futures contracts subject to the tax regime for digital assets, or as complex financial products requiring stricter regulation? The AMF (French Financial Markets Authority) considers that they do not clearly fall into the categories defined by law, which makes their legal and tax status uncertain.
In the crosshairs of regulators: Binance Futures banned in France
Binance has been investigated in several countries, including France, for marketing financial products deemed complex. These investigations have prompted authorities, particularly the AMF (French Financial Markets Authority), to increase their scrutiny of derivative products such as perpetual contracts. While this does not invalidate all of Binance's services, these products are now subject to stricter regulations.
Nature of perpetual contracts and tax implications for Binance Futures in France
Perpetual contracts, unlike traditional futures contracts, do not have an expiry date. This characteristic creates legal uncertainty : should they be classified as digital assets or as complex financial products subject to stricter regulations? The AMF (French Financial Markets Authority) considers that they do not clearly fit into any defined category, making their legal and tax treatment complex.
In addition, the funding rate mechanisms associated with these contracts can generate taxable cash flows, even without closing a position. This further complicates their tax treatment.
In this context of regulatory and fiscal uncertainty , Binance preferred to suspend its perpetual contracts in France , in order not to risk sanctions or violate an uncertain legal framework.
Binance Futures banned in France: The best alternatives for trading perpetual contracts
Decentralized perpetual contract platforms: Drift and dYdX
Drift and dYdX platforms allow trading perpetual contracts without going through a centralized platform like Binance . They operate using smart contract ( autonomous programs on the blockchain) that automatically manage orders, leverage, and liquidity, without intermediaries.
How do smart contractwork in perpetuals trading?
Opening and managing positions
- long position (betting on the rise) or a short position (betting on the fall).
- His order is recorded on the blockchain by a smart contract which ensures the smooth execution of the trade.
Leverage and margin
- These platforms allow you to trade with leverage (example: 10x means that you bet 10 times more than your capital).
- A smart contract constantly checks if the trader has enough funds to cover their losses.
Automatic liquidation
- If the market moves against the trader, and their balance becomes insufficient, the smart contract automatically closes their position to avoid excessive losses.
Funding rate
- Since these contracts have no expiry date , a financing rate is applied to keep their price close to the real market (spot market).
- long traders short traders (or vice versa), according to supply and demand.
Liquidity Management
- Unlike centralized platforms , these platforms use liquidity pools (crypto reserves provided by other users) to execute orders.
- Some also use an off-chain order book , such as dYdX , to improve transaction speed.
Security and transparency
- All transactions are recorded on the blockchain, which prevents manipulation and allows all actions to be verified in real time.
- The user remains in control of their funds since they use their own wallet and not that of a platform.
Why are these platforms an alternative to Binance Futures?
They offer the same features (leverage, short selling, seamless trading), but without a central intermediary. Thanks to DeFi (decentralized finance), they guarantee greater transparency , more control over your funds , and less risk associated with a platform that could block withdrawals or manipulate the market.
For a trader looking for an alternative to Binance Futures , these decentralized platforms are currently the best option available.
Drift : Trading experience on Solana
How does Drift work?
Drift is a decentralized exchange initially developed on Solana , a blockchain known for its speed and low transaction fees. The principle is quite simple: you connect your wallet , deposit the accepted cryptocurrency (often USDC USDC Solana Solana , and then you can take long or short positions on different currency pairs.
Advantages of Drift
- Drift stands out with a rich offering of more than 50 trading pairs , covering major cryptocurrencies like BTC , ETH or SOL, but also many native tokens from the Solana .
- Trading fees are very competitive, with -0.01% for makers (you are paid to bring liquidity) and 0.1% for takers at most FUEL loyalty program , which rewards users based on their activity on the platform.
- Drift offers return options thanks to loans/loans, providing liquidity as well as vaults.
- Drift also offers its BET prediction market, similar to Polymarket .
dYdX : the benchmark DEX for derivatives
How does dYdX work?
dYdX decentralized perpetual contract trading . Initially launched on Ethereum , the protocol used a layer 2 architecture to offer fast and low-cost transactions. Since its transition to its own blockchain, dYdX Chain Cosmos ecosystem , the protocol operates in an even more decentralized manner, with a proof-of-stake .
To start trading, simply connect a compatible wallet and fund your dYdX with USDC , the main stablecoin used on the platform. Users can then choose their leverage , place long or short orders , and access a wide range of crypto pairs while benefiting from the advantages of decentralized finance (DeFi) .
For more details, we invite you to visit our article on dYdX works and how to use it .
Advantages of dYdX
- dYdX combines the technical performance of a centralized exchange with the transparency guarantees of DeFi. Its main advantage is its new sovereign blockchain ( dYdX Chain) , which allows it to ensure fast order execution , near-instant finality , and a smooth trading experience without network congestion.
- The platform offers more than 200 active perpetual markets , with leverage up to 50x on major crypto pairs.
- Trading fees are particularly competitive (0.5% max for takers and 0.1% for makers) , and can be further reduced depending on the trading volume or through staking DYDX token . Finally, the Cosmos environment allows dYdX to rely on a robust decentralized model , where network security is based on a set of independent validators, strengthening the protocol's autonomy and resilience.
Binance Futures banned in France: Main risks associated with cryptocurrency futures trading
Leverage and volatility
Cryptocurrencies are known for their volatility . When you combine this volatility with leverage , x10), your potential gains may seem very attractive, but your potential losses can be just as brutal. It's not uncommon to see positions liquidated within minutes during sudden market fluctuations.
According to several studies, including those conducted by various crypto analysis firms in 2021, the majority of traders lose their funds when they venture into leveraged derivatives
Binance Futures banned in France: suspicions of illegal practices
Another factor contributing to the ban on Binance futures in France lies in the suspicions of money laundering and illegal practices surrounding Binance . Regulators fear that these highly volatile financial instruments could be used to conceal fraudulent transactions. While Binance has consistently stated its willingness to cooperate with authorities and improve its image, the ongoing investigations have prompted the platform to strengthen its compliance procedures ( KYC , anti-money laundering, etc.).
In this context, the suspension of perpetual contracts may have been seen as a way to reassure the authorities and avoid harsher penalties. However, the investigations have not yet yielded a clear outcome, and Binance maintains that it is actively working to implement regulatory safeguards capable of satisfying the AMF and other European regulators.
Binance Futures banned in France: What are the impacts for French traders?
Decrease in the supply of derivative products
The main impact for traders residing in France is the loss of a popular tool for speculating on both rising and falling markets. Perpetual contracts allow traders to bet on a downward trend (short position) or an upward trend (long position) with leverage . The discontinuation of this offering forces many speculators to revise their strategies or migrate to other platforms.
Searching for alternatives
Faced with the inability to use Binance Futures in France, many traders are now turning to decentralized platforms Drift and dYdX . Before taking the plunge, it is crucial to fully understand the risks involved, the platform's reliability, and how the wallet works.
To help you with this, we offer our free step-by-step guide to learning how to use a decentralized wallet, with supporting screenshots.
What you will learn:
✔ Mastering a decentralized wallet ( DeFi ) – Learn how to manage your assets without intermediaries and interact directly with the blockchain.
✔ Transacting via a decentralized wallet – A practical guide to trading cryptocurrencies independently.
✔ Exploring decentralized finance (DeFi) – Discover advanced concepts like staking and NFTs .
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Conclusion: What alternatives exist after the ban on Binance Futures in France?
The ban on perpetual contracts on Binance in France regulatory and tax constraints on legally offering leveraged derivative products.
Fortunately, alternatives exist thanks to decentralized exchanges like Drift and dYdX . These platforms allow traders to trade perpetual contracts while retaining control of their funds, without going through a centralized intermediary. With transparent mechanisms based on smart contract , they offer a robust alternative to CEXs, while guaranteeing free and uncensored access to the markets.
Evolving regulations in France and Europe could redefine the legal framework for crypto derivatives in the coming years. In the meantime, DEXs specializing in perpetuals remain the best option for French traders looking to speculate on the rise or fall of the crypto market without centralized restrictions .
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Yoann
Training engineer, I quickly became interested in the field of finance. Convinced that decentralized finance has a bright future ahead of it, I participate in its democratization by developing Crypternon.
