In order to align with the upcoming European Union (EU) regulations on crypto-assets (MiCA) scheduled for December 2024, Malta has launched a public consultation to reshape its existing crypto policies. Joining France and other EU nations, this strategic approach enables Malta to stay one step ahead in promoting a regulated and dynamic crypto market. The public is encouraged to participate in this consultation until September 29, shedding light on the nuances of the crypto realm and paving the way for informed policy changes.
To ensure a smooth transition for virtual financial asset (VFA) service providers, the Authority is taking measures to align the VFA framework with MiCAR before its implementation date by publishing a draft update to Chapter 3 applicable to VFA service providers for consultation.
Revision of Financial Asset Rules
The Malta Financial Services Authority (MFSA) is proposing a revamp of the current virtual financial asset (VFA) rulebook, a comprehensive framework established in 2018. The proposed changes include the removal of system audit requirements for VFA license holders, and substantial adjustments to capital requirements for Class 3 and 4 license holders, setting them at €125,000 and €150,000 respectively.
Additionally, the MFSA plans to update outsourcing requirements in tandem with the MiCA provisions, incorporating specific rules for MiCA services where applicable. This includes adjusting rules governing VFA exchanges and customer suitability assessments, ensuring a seamless transition to the broader EU regulatory landscape in 2024.
Aligning with EU Universal Laws: A Strategic Decision
In a rapidly evolving crypto landscape, Malta had two viable paths: wait for the formal implementation of MiCA laws over an 18-month period, or proactively modify the existing regulations in alignment with the imminent universal EU regulations.
This strategic decision echoes the sentiments shared by regulators last October, highlighting that early modifications to crypto regulations would catalyze the transition process, ensuring that VFA license holders could easily adapt to MiCA guidelines. Notably, France, an EU member nation, is also seeking to revise its crypto regulatory frameworks, resonating with the principles MiCA will introduce in early 2024.