By
Bena Ilyas
May 9th, 2024
Aside from the EU, Hong Kong and the United Kingdom have also made progress with crypto regulation.
Malta’s Financial Services Authority (MFSA) has begun a public consultation on the proposed changes to its crypto rulebook. The regulator circulated a draft document representing the revised version of its crypto regulation on Monday.
Malta issued the rulebook for the first time in February 2019. Since then, the document has passed through five revisions to align it with best practices globally. The current attempt seeks to align the rulebook with the Markets in Crypto-Assets framework.
The European Union (EU) proposed the MiCA framework in September 2020. The regulation will allow crypto service providers to operate across the 27 European Union countries with a single license. Following several revisions, the rule came into force in June 2023. The regulation will apply to crypto-asset service providers as of 30 December 2024, giving the companies enough time to meet the requirements.
As a member of the EU, Malta wants to align its crypto rules with MiCA before the framework kicks off fully. MFSA believes the change will guarantee a seamless transition for all Virtual Financial Assets (‘VFA’) Service Providers” in the country. The regulator has thus proposed several adjustments to the rulebook and made the draft available to the public for comments.
Adjustments to the Malta Crypto Rulebook
Notable among the changes to the crypto rulebook is that crypto providers must now have “an orderly wind-down plan”. In essence, crypto providers must have a plan to prevent significant losses to customers in the event of a permanent cessation, sale, or transfer of the business operation.
Again, the regulator reduced the capital requirements of Class 3 and Class 4 companies. It also incorporated service-specific requirements into its rules. Once published, the rulebook will become effective immediately.
However, MFSA also proposes an additional three months to allow VFAs to comply with all the items. The public has till September 29 to send in their feedback and queries.
Regulatory Clarity is Now a Must
Aside from the EU, Hong Kong and the United Kingdom have also made progress with crypto regulation. Only the United States is lagging with crypto regulation. However, there appears to be a turning tide with the recent ETF filings. Whatever the case, clear crypto rules have become a necessity across nations if investors will remain safe.
