Malta Takes Key Steps To Normalizing Cryptocurrency
Malta recently promised to make itself friendly and open towards the increasingly popular cryptocurrency market. Because of their interest in providing a safe-haven for crypto-companies, they have won the support of two very large exchanges. Both Binance and OKEx took up roots within the small territory, capitalizing on a business and governmental climate which lends itself to the establishment of innovative cryptocurrency-based businesses.
The presence of these two significant exchanges in the small territory created an exciting bubble of cryptocurrency activity. One source refers to them as the busiest territory in all of the world for the trade of alternative, blockchain currencies. Because of this massive interest in the exchange market, the governmental officials in charge of the Malta economy have promised to make the market even more accessible to cryptocurrency innovators through the creation of a distinct regulatory framework for the new industry.
But the small municipality isn’t all talk; the presence of these two major cryptocurrency exchanges has incentivized crypto-development in the new Malta market. As a response, the government of Malta has long promised the creation of this legitimate regulatory framework to address some of the problems preventing investors from jumping into the growing economic sector.
Malta has recently made right on this promise with the creation of a three-pronged framework. Malta created three new bills: the Virtual Financial Assets Bill, the Innovative Technology Arrangements and Services Bill, and the Digital Innovation Bill.
Virtual Financial Assets Bill
This ICO regulation prohibits the creation of fundraising campaigns that do not publish a white paper, a document explaining the core components behind the product which a company is raising money for. There are twenty-six specifications necessary to include within a legal white paper for a cryptocurrency company running a white paper to be compliant with this law.
These include an explanation of the reasoning behind the ICO, a description of the company’s technology being offered for sale, a walkthrough of the “sustainability/scalability” of the product, as list of risks and risk-minimization strategies, an explanation of the currency created for the ICO, as well as the methods of payment accepted for participation.
Malta Digital Innovation Bill
This bill creates a regulatory body specifically tasked with promoting and regulating the interests of the “blockchain industry” within the newly-created ecosystem. In addition to surveying the ecosystem and working to promote a healthy community, the organization, named the Malta Digital Innovation Authority, will be responsible with creating an annual report on the development of the industry.
Additionally, the department will be comprised of one chairman and from four to eight members, who are determined by the government minister for one year terms.
Innovative Technology Arrangements And Services Bill
This final component of the three-pronged regulatory framework facilitates the creation of a mechanism to legally recognize the legitimacy of blockchain businesses within Malta. This bill does not included nearly as many specifications as the previous bills, mostly because it functions as a prerequisite to their satisfaction. Compliance with Malta’s cryptocurrency laws first requires registration under this newly-created framework, and then compliance with the other two aspects of legitimacy listed above.
Malta’s recent regulatory actions make good on its promise to create a legitimate ecosystem for blockchain-based enterprises to thrive.