Crypto license in Malta

In 2018, the Maltese senate passed a law establishing a legal substructure for p2p systems, e-currencies and digital assets, making it one of the friendliest laws in the world for a sector that has caused concern and caution among regulators in other countries. Malta also hopes that this will serve to clean up its financial system and prevent international scammers from registering here.

Given the significant media interest in the fledgling crypto asset industry, the law laid out stringent demands for other service providers, including brokers, portfolio managers, custodians, wallet providers, investment advisors, and perhaps most importantly, cryptocurrency exchanges.

Benefits of obtaining a Malta cryptocurrency license

• Flexible approach to regulation of modern technologies.
• The stability of the monetary system and the integrity of the market.
• Malta is an authoritative jurisdiction.
• Competitive tax rates.

If you are interested in obtaining a crypto license in Malta, it is important to consider that while the V AML Directive primarily only covers “intermediation” between the world of cryptocurrencies and FIAT (hence only regulates FIAT crypto exchanges in Malta and wallet providers), Malta has granted overarching substructure by fully implementing the FATF Guidelines through:

• ensuring that cryptocurrency exchange license in Malta entities and subject to AML.

Controlling of cryptocurrency license Malta

Malta is one of the first countries in which the legal substructure for blockchain technology was created. The Maltese senate has passed three Legislative Decrees giving any interested investor a clear understanding of the legal substructure for conducting legal activities related to crypto assets and for registering a crypto business in the country.

The set of laws regulating the Malta Virtual Financial Assets Act includes:

1. The MDIA law, developed by the MDIA.
2. ITAS Law, which provides for the authorization and certification of technics providers. Software used in the development of DLTs, smart contracts and related applications, as well as other types of innovative technological solutions and their developers, are subject to this Law.
3. The VFAA law, which applies to the regulation of VFA service providers, ICOs and VFA agents. 

As stipulated by the VFAA, entities intending to offer VFA services on or off the island must obtain a VFA license Malta from the local MFSA. The provisions of the law cover a wide range of services, including:

• receiving/transmitting VFA;
• execution of transactions on behalf of other parties;
• work with own accounts;
• nominee and custodian services;
• portfolio management;
• VFA placement;
• consultations;
• how the VFA exchange works.

VFA paper

Malta Virtual Financial Asset (VFA) License given the significant media interest in the fledgling crypto asset industry, the law laid out stringent demands for other service providers, including brokers, portfolio managers, custodians, wallet providers, investment advisors, and perhaps most importantly, cryptocurrency exchanges.

If the applicant is an individual, then he must be in the country. If the applicant is a legal entity, then it can be registered in the country. Alternatively, the applicant company may be registered abroad in a “respected jurisdiction” (i.e. not in an offshore country), but it must necessarily open its branch in the country.

With the passage of legislation governing crypto, ICOs and cognate technology service providers, Malta has established itself as a major Fintech player in the region.

Obtaining a Malta’s crypto license: the role of MFSA and MDIA

MFSA is the sole regulator of fin. services on the island. The MFSA regulates Malta banking VFA license, financial institutions, insurance companies and insurance intermediaries, investment companies. services and collective investment schemes, securities markets, recognized investment Malta crypto exchange, trust management companies. Since 2018, the regulator has also carried out ongoing supervision and licensing of crypto companies in the country. MFSA has created its “FinTech regulatory sandbox” by providing a platform for testing business concepts.

The MDIA is the main body responsible for implementing public policy that promotes the country as a center of excellence for technological innovation and sets and enforces international standards. The Authority strives to protect and support users and encourages all kinds of innovation by providing flexibility in certifying innovative technology agreements.

The procedure for obtaining a Malta cryptocurrency exchange license

• Company registration in the country.
• If necessary, search for a local registered officer and local directors.
• Drawing up Charters, protocols and issues of shares of owners.
• Opening a bank account suitable for crypto exchange in Malta operations.
• Opening a trading account to accept credit and debit cards.
• Drawing up a business plan, fin. reporting and financial forecasts.
• Development of AML policy and KYC principles.
• Preparation of an application for a Malta VFA license.
• Representation of interests before the licensing regulatory body, banks and liquidity providers.

Crypto license in Malta: licensing features

Obtaining a license for operations with cryptocurrency is possible after passing the test for compliance with the qualification demands:

• Testing and aptitude testing.
• Having a physical presence in the country.
• Appointment of a local VFA agent.
• Provision of evidence that financial instruments meet all demands.
• Meeting liquidity and capital adequacy demands (depending on license class).

Features of obtaining a Maltese cryptocurrency license

Before applying, persons wishing to obtain a license for a crypto exchange in Malta must fulfill certain demands. If the physical The person applying for a permit needs to establish substance. In the case when the applicant for licensing acts as a legal entity. person, he must comply with the following legal provisions:

• Open a branch in the country.
• Directors, senior management, shareholders and UBOs must pass an eligibility test.
• The applicant must appoint a VFA agent who will file with the MFSA and act as an intermediary between the MFSA and the applicant and pass the Financial Instrument Test (FIT) to ensure that the service being offered falls within the definition of a VFA under the VFAA Act.
• At least two persons must hold leadership positions or be members of the board of administrators.
• The Applicant must designate an AML Compliance Reporter, a Compliance Officer, and a Risk Manager.
• Min. authorized capital.

Important, residency restrictions for those who wish to register a cryptocurrency in Malta do not apply.