The Maltese Government has issued a bill entitled the Virtual Financial Assets Act (“the Bill”). The aim of the Bill is to provide a sound legislative framework for Malta to regulate and responsibly promote the use of crypto currencies, crypto exchanges and other crypto-related services. Complementing this proposed framework, the Government has also issued the bill for the Malta Digital Innovation Authority Act and the bill for the Innovative Technology Arrangements and Services Act.
The Bill follows extensive consultation by the MFSA on Initial Coin Offerings, Virtual Currencies and Related Service Providers as well as the issue of Supplementary Conditions on Collective Investment Schemes investing in Virtual Currencies. This also follows the public discussion on the establishment of a Maltese DLT Regulator and the ongoing MFSA consultation on the Financial Instrument Test.
Malta is therefore one of the first European countries proposing technology-neutral regulation and by promoting further technological innovations and growth, it is continuing to build on its robust financial services industry.
The Bill primarily establishes legal definitions of numerous cryptocurrency and DLT-related concepts, offering legal certainty to business promoters and investors alike. The popularly-used term “cryptocurrencies” is coined as “Virtual Financial Assets” or “VFAs” and the Bill goes on to define “VFA Services”, including the operation and licensing of a “VFA Exchange”. The concept of an “Initial Coin Offering” or as it is more commonly known, an “ICO”, is being termed as an “Initial VFA Offering” and this excludes the issue of a “virtual token”.
The other main highlights of the Bill are as follows:
As the proposed Bill moves on to be implemented, we can also expect the MFSA to issue additional guidelines and rules to offer further guidance on this new legislative framework.
GTG Advocates, together with our partner Afilexion Alliance, can provide assistance on the regulatory process, licensing and regulation of ICOs, cryptocurrencies and blockchain, and exchanges, as well as offering advice in assessing the potential and impact of these new developments on your business strategy.
For more information or if you have any questions, please feel free to contact Dr Ian Gauci on email@example.com or Dr Cherise Abela Grech on firstname.lastname@example.org.