Welcome to the ICO, blockchain and crypto advisory services of Dr Werner & Partner. Like with any other of our services, we focus solely on Malta, for businesses, entrepreneurs and start-ups who are looking for a next level consultant, to assist our clients with their next level ideas from a next level country.

Yep, you came to the right place if you’re looking for next level chakkawanga.

In Malta the regulation for VFA services like crypto exchanges, crypto brokers, crypto payment processors, crypto investment advisors or asset managers or any other crypto service requires your business to be licensed — most of the services will be licensed under the new Virtual Financial Assets Act, the VFAA.

The smart people at the regulator have published a “consultation paper”.It appears that they will allow some VFA service providers to hold and control FIAT. We cannot tell you how excited we are about that! That is sooooo advanced and next level in terms of regulation because there is an authority that actually delivers exactly what the peeps need.

See for yourself for an exchange:

Licence holders authorized to operate a VFA exchange and to hold or control clients’ money, virtual financial assets and, or private cryptographic keys and custodian or nominee services solely in relation to the operation and activities of such VFA exchange.

We also have a pretty good idea from the said consultation paper of what the “one time” and “annual licence and supervisory fees” will be, and I am happy to share those further down below.

Before you start popping the expensive bottles:

The licence under the VFAA might be “easier” than under MiFID but is a licence nonetheless. With that being said (can you feel my excitement?) THERE IS A 12 MONTHS TRANSITION PERIOD after which you latest have to APPLY.

Yes, correct: If you have company in Malta before the 1/10/2018 (where the law will probably come into force), and if you are operating with that company before the 01/10/2018 then in the first 12 months after the law comes into force, you can start working like it’s 1999 straight away, with a few strings attached. You will just need to have the application filed before the 12 months end (which will probably be done by us). This gives you the opportunity to work and gives us the opportunity to prepare the licence — isn’t that just super nice?

Everyone is talking about Bitcoin and ICOs und how to get rich fast. We all know, that cryptocurrency is only a very small part of the cake – more a tool or product of the blockchain technology or DISTRIBUTED LEDGERTECHNOLOGY (DLT).

The Maltese new legal framework includes a regulation for DLT, which is one of a kind worldwide. We anticipate DLT to be the bigger business in general and for Malta.

The “licence” or more the “accreditation” of DLTin Malta is entirely voluntarily. Hey, you might think, that’s easy, so I don’t have it approved then. Yes and no, we think. With increasing mainstreaming of DLT in day to day life and with more and more interaction with “old” technology and institutions, like banks, companies or (sorry) courts and lawyers, you may wish to consider this opinion. Having a rubberstamp from the Local competent Authority as will be the Malta Digital Innovation Authority might also be useful for future business.

First of all, an EU government approved DLT(with a nice stamp to show off on the website) in itself will create trust and credibility. But it also helps to detect flaws in your DLT, that you might not be aware of (because it’s audited). And third, in case of a legal dispute, you certainly have more options on your side when in comes to the question of “who is liable”.

The rubberstamping of the DLT is done by auditors appointed by the Maltese government authority and I am putting my serious face on again: Be prepared that you have to give something to Malta in order to receive the accreditation. Setup a company, setup offices, employ people. They will not approve a DLT on a remote island in the Caribbean with no physical link at all to Malta – remember and repeat: It’s a business for Malta, just like it is for you.

What we can do? If you are already busy on the chain, we can assist you with the accreditation of your DLT in Malta.

Migration to the blockchain — if you are thinking: Hey, can I maybe also do my service blockchain based? We can give you the answer to that and we can assist you with migrating your business from off chain to on chain.

The licence classes and the damage

Anyway, let’s dive in and see, what licences are actually there? Well there’s 4 licences available, VFAA 1 -4 with 1 being the “smallest” and least complex and 4 being the “big boy” and most complex.

VFAA CLASS 1

Licence holders authorised to receive and transmit orders and, or provide investment advice in relation to one or more virtual financial assets and, or the placing of virtual financial assets.

Application Fee (onetime)

€3,000

Supervisory Fee (yearly)

For revenue up to €50,000 = €2,750
Further tranches of €50,000 up to a maximum of €1,000,000 = €350 per tranche

VFAA CLASS 2

Licence holders authorised to provide any VFA service and to hold or control clients’ money, but not to operate a VFA exchange or deal for their own account.

Application Fee (onetime)

€5,000

Supervisory Fee (yearly)

For revenue up to €250,000 = €4,500
Further tranches of €250,000 up to a maximum of €5,000,000 = €400 per tranche

VFAA CLASS 3

Licence holders authorised to provide any VFA service and to hold or control clients’ money, but not to operate a VFA exchange.

Application Fee (one time)

€7,000

Supervisory Fee (yearly)

For revenue up to €250,000 = €6,000
Further tranches of €250,000 up to a maximum of €50,000,000 = €400 per tranche

VFAA CLASS 4

Licence holders authorised to operate a VFA exchange and to hold or control clients’ money, virtual financial assets and, or private cryptographic keys and custodian or nominee services solely in relation to the operation and activities of such VFA exchange.

Application Fee (onetime)

€12,000

Supervisory Fee (yearly)

For revenue up to €1,000,000 = €25,000
Further tranches of €1,000,000 up to a maximum of €100,000,000 = €2,500 per tranche

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