Crypto Regulations in Malta

Malta is known as the Blockchain Island and is the only country to have provided a set of regulations for operators in the field. Yes, cryptocurrency is legal in the country. On 4 July 2018, Malta’s parliament passed three bills into law, establishing a regulatory framework for blockchain, cryptocurrency, and Distributed Ledger Technology. The move has made Malta one of the go-to places globally for crypto and blockchain business.

Source: Integritas

Malta currently does not have any legislation that specifically applies to cryptocurrency, but this will soon change.  The Maltese government has actively encouraged the development of cryptocurrency and issued many consultations and papers that discuss its regulation and development.  The aim of these regulations is “[t]o provide the necessary legal certainty to allow this industry to flourish.”

Source: Freeman Law

Malta has taken a very progressive approach to cryptocurrencies, positioning itself as a global leader in crypto regulation. While cryptocurrencies are not legal tender in Malta, they are recognized by the government as “a medium of exchange, a unit of account, or a store of value.” To complement existing AML/CTF legislation, the Maltese government was the first to enact a trio of digital assets-related acts (MDIA, ITAS, and VFA), along with blockchain legislation. Malta cryptocurrency regulation doesn’t include specific tax legislation nor is VAT currently applicable to transactions exchanging fiat currency for crypto.

Source: Comply Advantage

The way in which cryptocurrencies are seen by governments around the world differs. Some acknowledge that it is an alternative to legal tender whereas others regard it as a completely separate asset class or the payment method. At the current time, cryptocurrencies are unregulated under Maltese law, and exchanges of cryptocurrencies are seen as equivalent to commodity trading. Any company or individual wishing to make use of cryptocurrencies does not currently need to seek any authorization from the Malta Financial Services Authority (MFSA).

Source: Welcome Center Malta

The Virtual Financial Assets Act (the “VFA Act”) enacted on the 1st of November 2018, lays the foundation for the regulatory framework laid in Malta. The VFA Act symbolizes the progressive approach taken by Malta in regulating blockchain and Distributed Ledger Technology (“DLT”). The VFA Act creates legal certainty as to the classification of every DLT asset and provides a licensing regime and a regulated environment to entities providing services in relation to DLT assets which are classified as Virtual Financial Assets (“VFAs”). Moreover, the VFA Act enforces investor protection by requiring entities issuing DLT assets classified as VFAs to register a whitepaper with the Malta Financial Services Authority (the “MFSA”) containing minimum stipulated information as per Appendix I of the VFA Act.

Source: Zerafa

The cryptocurrency transaction in Malta falls under zero percent tax, holding Bitcoin and Crypto for any period does not also fall under taxation in malta. Coming to Crypto trading, yes crypto trading in Malta falls under 35 percent business income tax in the country. And the tax may vary between 0% to 5% based on the income and residency of an individual.

Source: Coin Pedia

Article 96(2) of Malta’s Income Tax Act (ITA) sets in place a clear position on the way holding or trading virtual financial assets in Malta will give rise to tax liability. The risk in dealing with such emerging assets without clear treatment of tax is that a fiscal authority may at any time implement new tax legislation, that may take effect retrospectively. This renders crypto operations in an unregulated jurisdiction extremely uncertain.

Source: Interserv

Cryptocurrency exchanges are legal in Malta and in 2018 the Maltese government introduced landmark legislation that defined a new regulatory framework for cryptocurrencies and addressed AML/CFT concerns. This Malta cryptocurrency regulation comprised several bills, including the Virtual Financial Assets Act (VFA) which set a global precedent by establishing a regulatory regime applicable to crypto exchanges, ICOs, brokers, wallet providers, advisers, and asset managers.

Source: Comply Advantage

As crypto exchanges in Malta are legal, the Maltese government defined a new regulatory framework in 2018 called landmark legislation for cryptocurrencies and addressed AML/CFT concerns as well. The Virtual Financial Assets Act (VFA) bill is one of the Maltese crypto regulation bills which establishes a regulatory regime for crypto exchanges, ICOs, Brokers, wallet providers, advisers, and asset managers.

Source: Coin Pedia

On the sunny Mediterranean island of Malta, everything revolves around blockchain technology. Before the Malta AI & Blockchain Summit takes place in a few weeks, the Maltese government is making headlines with the announcement of several exciting blockchain initiatives. At the same time, a separate bank is being set up to concentrate on financing blockchain and crypto start-ups.

Source: Drwerner

Binance, the world’s largest cryptocurrency exchange which was purported to lead Malta’s cryptocurrency revolution served as a conduit for the laundering of at least $2.35 billion in illicit funds, a Reuters investigation has found. In 2018, disgraced former prime minister Joseph Muscat welcomed Binance to Malta with much fanfare as he set his sights on turning Malta into a ‘Crypto Island Paradise’.

Source: Newsbook

Crypto investors in the European island nation of Malta have been warned to avoid a scam believed to currently be targeting residents of the country. Advertisements that claim that leading high-profile figures, including film stars, have endorsed particular crypto products have begun to feature in Facebook news feeds. These adverts claim that Bitcoin-related investments can lead to riches. They and the associated landing pages use some of the common hallmarks of crypto fraud such as large, colorful buttons, and calls to action for potential investors to “sign up to the Bitcoin revolution”. Investors are then required to make a minimum investment of €250 in order to get started.

Source: Forex Fraud

Europol announced the arrest of a gang of 10 international hackers that stole over US$ 100 million in cryptocurrencies. One of the arrests was made in Malta. The Maltese Police Force confirmed that the arrested hacker is a 17-year-old Maltese national. The investigation kicked off following a report received by the Cyber Crimes Unit in November 2019.

Source: Newsbook

Ten people across Malta, the United Kingdom, and Belgium have been arrested for allegedly hijacking the mobile phones of celebrities to steal personal information and millions in cryptocurrency. In a statement, Europol said that the ring could have stolen in excess of $100 million in cryptocurrencies.

Source: Lovin Malta

As innovation drives growth, the Malta Financial Services Authority (‘MFSA’) has launched its Fintech Regulatory Sandbox, which is an essential Research and Development tool for testing innovative, technology-enabled solutions, in a controlled environment.

Source: Mondaq

The Malta Financial Services Authority (“MFSA”) introduced the FinTech sandbox as a platform for sddm, FinTech operators to test the innovation for a specified period of time within the financial services sector under certain prescribed conditions.

Source: Lecocq Association