Blockchain And Crypto Startups In Malta Are Struggling to Open Bank Accounts
Malta has always reported to crypto friendly. The island has been receiving companies related to the crypto market such as Binance and BitBay. Due to this situation, Malta could be experiencing important economic growth.
The Prime Minister of Malta, Joseph Muscat, has been very favorable towards virtual currencies and blockchain technology and has pushed for friendly legislation in the country. As mentioned before, some of the firms that decided to settle their operations in the country were BitBay, ZebPay, and Binance. These three are very important digital currency exchanges that operate in different countries. These firms made large investments in the country, hired employees and helped the economy to grow even faster.
Although this seems to be in jeopardy. Many anonymous sources from company service providers, legal firms and corporate finance companies have reported that they are been declined by banks citing risk factors. The sources said banks were not distinguishing between cryptocurrency and blockchain, even though the two were not always linked.
Parliamentary Secretary for Financial Services Silvio Schembri said that there are a few banks who consider blockchains but not cryptocurrency company. Schembri said that
“One should make a clear distinction between blockchain operators and crypto operators. The general understanding is that when it comes to crypto operators, banks are waiting for operators to obtain an MFSA [Malta Financial Services Authority] license before opening their doors – which is understandable.”
Time of Malta, who broke the news story and contacted the anonymous sources said in their report:
“A new legislative AML/CFT framework entered into force in 2018, but according to the opinion of the European Commission (July 2018), the transposition of the EU’s Fourth AML Directive is not complete and recent bank intervention cases exposed serious shortfalls in the framework. Malta is currently undergoing an assessment against the Financial Action Task Force 2012 standard.”
The title of Malta being the leaders in blockchain and cryptocurrency adoption seems to be in peril. Local banks have to work with experts to change their policies and make a clear distinction between blockchain and cryptocurrencies.