Blockchain, ICO and VFA Advisory
The Maltese Parliament passed and approved the 3 cryptocurrency and blockchain legislative acts. This marks the beginning of Malta’s reputation as the Blockchain Island.
- Malta Digital Innovation Authority Act (the “MDIA Act”);
- Innovative Technology Arrangements and Service Act (the “TAS Act”);
- The Virtual Financial Assets bill (the “VFA Act”), The idea is to set up a robust and comprehensive principle-based regime.
The ultimate objective is to foster a favourable environment for distributed ledger technology (DLT) platforms and related service providers. Please find below a brief summary of the various acts, as follows:
- Malta Digital Innovation Authority Act (the “MDIA Act”) The act establishes a new authority, to be known as the Malta Digital Innovation Authority. It also outlines the guiding principles for this new public body in supporting the development of Malta as a centre of excellence for innovative technology arrangements. One of the main roles of the newly formed public authority will primarily revolve around the certification and supervision of voluntary applications by (i) innovative technology service providers or (ii) the technical administrators or any other persons involved in any innovative technology arrangements. The MDIA Act aims to nurture a culture of collaboration between the new regulator and other national competent authorities in Malta (namely the Malta Financial Services Authority (MFSA), by providing for a principle of mutual recognition, inter alia, in the context of qualifications and competencies of persons and organisations which review and audit the innovative technology arrangements.
- Innovative Technology Arrangements and Service Act (the “TAS Bill”): This provides for the regulatory framework of designated innovative technology arrangements and services as defined in the first two schedules to the Act and also caters for the exercise by the MDIA of regulatory functions with regards thereto. It is being proposed that any person will be able, on a voluntary basis, to request MDIA to certify eligible arrangements or services. The TAS Act further states that MDIA may also accept to register persons providing different innovative technology services while giving regard a number of matters, including qualifications, experience, sufficient technical resources or third-party support and whether the relevant service provider is fit and proper for the provision of the services it declares he intends to provide.
- The Virtual Financial Assets bill (the “VFA Act”) This regulates the offering of virtual financial assets (or “initial coin offerings” or “ICOs”) as well as service providers in the virtual financial assets space. The proposed legislation imposes licensing requirements and on-going obligations to be complied with by (i) ICO-issuers or (ii) by those who intend to provide services ancillary to an ICO, if the issue or the service in question is provided in or from Malta. The issuer of an ICO must appoint an approved agent, who must be approved by the Malta Financial Services Authority. The VFA Act also spearheads the implementation of a bespoke ‘financial instrument test’ by bestowing the competent authority the power to introduce such a novel test, applicable to issuers, agents and licence-holders, for the purpose of determining whether a DLT asset qualifies as electronic money, a financial instrument, virtual financial asset or virtual token.
The new regime safeguards investors’ rights by providing a blueprint for the minimum disclosure requirements (in terms of content and format) applicable to ICO whitepapers, and by outlining the manner in which advertisements and marketing relating to virtual financial assets are to be carried out. The whitepaper is the main document which revolves around the application for the operation of an ICO and it is the first step of the application process together with other KYC requirements.
What we offer:
- Legal and regulatory advice,
- Whitepaper review,
- Company incorporation,
- Pre and post ICO legal advisory,
- Taxation optimisation advice,
- AML & compliance advisory.
- VFA Registered Agent Role;