Malta’s proposal to comprehensively regulate blockchain and cryptocurrency related services
The Government of Malta has just issued a consultation document in relation to the proposed regulation of decentralised ledger technology platforms (DLT platforms) and initial coin offerings (ICOs), as well as brokers, exchanges and other intermediaries dealing in virtual currencies and similar assets, in or from Malta. This framework, once implemented, will place Malta as a one of the first jurisdictions to come up with a comprehensive blockchain and cryptocurrency regulatory framework in the world.
The proposal mentions three separate pieces of draft legislation, namely the Malta Digital Innovation Authority Bill (MDIA), the Technology Arrangements Service Bill (TAS) and the Virtual Currencies Bill (VC).
The TAS will set out the framework for the registration of Technology Service Providers and the certification of Technology Arrangements. This means that DLT platforms and related smart contracts can be registered and receive a seal of compliance by the MDIA. Auditors and Administrators of such Technology Arrangements will also be approved by the same Authority. The Bill will also propose the establishment of a Joint Co-Ordination Board that will ensure that any overlaps in competence by other national Authorities, such as the Malta Financial Service Authority and the Malta Information Technology Authority do not create bottlenecks or confusion to the industry.
The VC will provide the framework for the regulation of ICOs and intermediary services providers dealing in virtual currencies, such as brokers, exchanges, wallet providers, asset managers, investment advisors and market makers. The choice of the term ‘virtual currencies’ as opposed to cryptocurrencies aims to ensure technology neutrality of the legislation ensuring that it is future proof in the light of possible future technology advancements.
You may access the consultation document here –
WH Partners will be providing further details in the coming days. Should you wish to contribute to the consultation or request any further information, please feel free to contact us at blockchain@whpartners.eu.
Dr. Joseph F. Borg is an Advocate and Partner at WH Partners, heading the Blockchain Advisory and the Gaming and Gambling Advisory sections of the firm. He also practices in the areas of Esports, Corporate, IT, Telecoms and Intellectual Property Law. He also lectures Gaming Law at the University of Malta. Joe occupied the role of Secretary General of the Malta IT Law Association (MITLA) for over 3 years and is currently the Vice-President and Co-Founder of Bitmalta, which is a non-profit organisation with a mission to promoting and stimulating discussion about blockchain technology and cryptocurrencies in Malta. Before joining WH Partners he occupied the post of Chief Regulatory Officer of the Lotteries and Gaming Authority — Malta. Joe was also an elected Member on the Board of Trustees of the International Association of Gaming Regulators (IAGR), a position which he held throughout 2012. He had originally joined the Authority in March 2007 as Director Legal and Enforcement and has occupied this position for almost 4 years. Before joining the Authority, Joseph, acted as a Legal Counsel to Vodafone Malta Limited for three years.
