Malta has just published a bill to enact the Markets in Crypto-Assets Act which is expected to implement the relevant provisions of the Markets in Crypto-Assets Regulation (MiCAR) into Maltese law.
In line with MiCAR’s timelines, parts of the Act, primarily those relating to electronic-money tokens (EMT) and asset-referenced tokens (ART) are to be deemed to have come into force on 30th June 2024 whereas the remainder of the Act will come into force on 30th December 2024.
The Act largely emulates MiCAR’s provisions outlining those persons that fall under MiCAR’s remit and instances where exclusions apply. It thus seeks to regulate:
In the case of crypto-asset service providers currently authorised under the Virtual Financial Assets Act (VFA Act), they are being authorised to continue to provide, or hold themselves out as providing, the VFA services which they are licensed to provide in accordance with the provisions of the VFA Act and any regulations made, and rules issued thereunder until 1st July 2026 or until they are granted or refused an authorisation pursuant to Article 63 of MiCAR, whichever comes first.
The MFSA shall also apply a simplified procedure for applications for authorisation submitted by persons who, on 30th December 2024, are licensed in accordance with the VFA Act to provide, or hold themselves out as providing, one or more VFA services. This shall apply for applications submitted between 30th December 2024 and 1st July 2026.
The proposed Act also introduces amendments to the Maltese Banking Act to include references to MiCAR and the issue of EMTs and ARTs as well as the provision of crypto-asset services to the list of additional activities that entities authorised under the Banking Act may undertake.
Additional amendments are also envisaged for the VFA Act. After the previous amendments to the VFA Act where it was determined that the MFSA would no longer be accepting applications for authorisation of VFA Service Providers after the 1st of August 2024, the same is now expected to apply in the case of requests to register a white paper.
Furthermore, where a person has made, either directly or through a VFA agent, a request to the MFSA to register a white paper prior to the first date of coming into force of the Markets in Crypto-Assets Act (i.e. 30th June 2024) and the MFSA has not yet determined whether or not to register that white paper by such date, the said person is required to notify the MFSA in writing, whether it wishes to proceed with its request for the registration of the white paper or whether it wishes to withdraw the said request.
If no notification is made to the MFSA within 1 month of such date i.e. by 30th July 2024, the MFSA shall deem the request to register the white paper to have been withdrawn.
In addition to this, any white paper relating to an e-money token registered by the MFSA under the VFA Act shall be deemed to have automatically been deregistered on 30th June 2024. Any white paper relating to a VFA which is registered by the MFSA under the VFA Act shall automatically be deregistered on 30th December 2024.
Persons who, on 30th December 2024, are licensed under the VFA Act to provide, or hold themselves out as providing, one or more VFA services, may continue to provide, or hold themselves out as providing, those services until 1st July 2026 or until they are granted or refused an authorisation under MiCAR, whichever comes first. Furthermore, VFA service provider licences shall automatically be cancelled on 2nd July 2026 or upon the granting or refusal of an authorisation under MiCAR, whichever comes first.
The VFA Act will be ultimately repealed on 3rd July 2026.
The issue of this proposed bill continues to cement Malta as a trailblazer in the regulation of crypto-assets and crypto-asset service providers and in the implementation of MiCAR.
For more information or assistance regarding our Fintech services please contact Dr Ian Gauci and Dr Cherise Abela Grech.