On the 7th of December 2023, the Malta Financial Services Authority (the “MFSA” / the “Authority”) issued a circular setting out amendments to Chapter 3 of the Virtual Financial Assets (“VFA”) Rulebook, which aim to align Rulebook with the upcoming Markets in Crypto-Assets Regulation (“MiCA”).

The amendments set out changes to the ongoing obligations for VFA Service Providers which aim to harmonize the provisions of the authorisation and operating conditions for crypto-asset service providers found in the MiCA Regulation with those in Malta.

Furthermore, a legislative process to remove the role of the VFA Agent from the VFA Framework has commenced, to align with the fact that no such role shall exist under MiCA. Chapter 3 will be updated accordingly in due course of the legislative process. Further updates to the VFA Framework applicable to VFA Service Providers shall be made according to the MiCA’s supplementary text.

The changes to Chapter 3 shall become applicable through a two-stage process, namely the provisions listed under Stage 1 to become applicable as from the 1st of January 2024 while the provisions listed under Stage 2 becoming applicable as from the 1st of July 2024.

Through this circular, the MFSA also issued updates on accounting obligations of VFA Service Providers. In this regard, the MFSA shall be issuing an updated Virtual Financial Assets Service Provider (“VFASP”) Return in Q1, which in turn, the Authority expects the VFA Service Providers to submit at the end of Q1 as per their reporting obligations.

Moreover, the MFSA announced that it shall be reaching out to its VFA Service Provider Licensees in order to discuss matters relating to the MiCA and compliance relating thereto.

For further information on Fintech and Blockchain Law, kindly contact Dr Ian Gauci.

Disclaimer This article is not intended to impart legal advice and readers are asked to seek verification of statements made before acting on them.
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