The Financial Services Authority of Malta (MFSA) has published a Virtual Financial Assets (VFA) Rulebook. The document refers to the regulation of VFA issuers in accordance with the “Virtual Financial Assets Act” (VFAA). However, representatives of the market reacted rather skeptically to the publication of the rulebook and believe that the document needs to be finalized.
Malta became a jurisdiction where cryptocurrency has an official status. The Parliament of the island state adopted three bills related to the development of the industry - the “The Malta Digital Innovation Authority Act” (MDIA), the “The Innovative Technology Arrangements and Services Act” and the “Virtual Financial Assets Act” (VFAA). The new rules are designed to eliminate legal uncertainty and improve the investment climate in the country.
However, Malta Financial Services Authority later reported that one of these laws had not yet entered into force. Currently, the MFSA is developing rules, which will complement the VFAA. The law regulates the scope of the ICO. In particular, the document obliges each ICO project to publish a white paper. It should describe in detail every significant aspect of the project that prepares for fundraising. In addition, ICO startups should publicly disclose their financial data.
The law should become operational in October this year. In this regard, the authorities also opened consultations for market participants. Within this framework they are ready to answer all questions about future changes. All interested persons can apply to the MFSA, where they can receive explanations what specific changes the adoption of the law entails.
“I strongly suggest to stakeholders to participate in this consultation in order to help the MFSA come up with a well-balanced regulatory framework that is robust and attractive at the same time. It is clear that some things published in the rule book need to be polished and, in some cases, toned down”, Joseph Borg, Partner at WH Partners said.
WHY IS IT IMPORTANT?
- The Government of Malta notes that legal norms combined with two other laws are aimed at ensuring openness and transparency of the market, protection of consumer rights and industry.
- Malta is called "blockchain island" for the reason that this country adopts laws and initiatives that promote developing digital currencies on its territory. The state has already attracted several large crypto exchanges, including two largest trading platforms - Binance and OKEx.