The crypto boom of the last couple of years was a shot in the arm for many small economies in Europe. This opened the doors for investment and growth in many small countries. Places like the Baltic states grabbed this opportunity by quickly passing a slew of laws to simplify online transactions. Malta was no exception.
On the 2nd of November, their government passed the Virtual Financial Assets (VFA) Act of 2018, in order to increase consumer protections. Speaking at the Malta Blockchain Summit, speaker Silvio Schembri, on behalf of his government made the following announcement,
“Malta government is strictly behind AML crypto-crypto and will enforce all its power through MFSA and VFA to prevent that. They are laying their expertise in order to allow only safe technologies provide better services within their regulated providers.”
The Member of Parlament from Malta discussed his Government’s latest effort to increase regulatory protections for crypto users to make the blockchain-centric island's economy more attractive to prospective investors.
Malta's effort comes to fruition after nearly a year of careful planning. The new regulatory framework is going to address topics such as crypto consumer protections and token offerings. It will also delineate a set of newer and stricter criteria, for crypto companies, that need to be ticked off before these entities will be allowed to legally operate within the small nation. The oversight of these companies will be monitored by Malta’s Financial Services Authority (MFSA). They will be empowered with provisions in the act that will allow for its enforcement in matters pertaining to the registration and licensing of all Virtual Financial Asset Offerings (IVFAO) that are going to operate from or in the nation's borders.
The county of Malta has had a surge in popularity as a leading ‘blockchain hub’. In recognition of this, the national parliament had understood the opportunity and the urgency in the need to have a clear set of guidelines to regulate this fledgling new industry.
As more and more blockchain and other online businesses have started to set up their base in the tiny Mediterranean island, there was a clear need for such a framework. This had been touted as essential, so as to equip the state machinery, to be able to ensure that consumers are protected against deviant activities such as fraud. Along with this, it is meant to bolster other security measures such as KYC and AML procedures.
After the announcement at the summit, many hailed this latest development as an important milestone for the industry and especially for Malta’s flourishing crypto community. This sort of earnest efforts by a national government, which places investor protections above all in its regulatory framework, has rightly been applauded. It has been recognized by many in the crypto verse that governments have the right and should exercise some sort of control over the industry. This, they argue, will ensure a secure environment for the industry, thereby increasing consumer confidence and help it grow.