Providing support to the cryptocurrency economy, the Malta Financial Services Authority (MFSA) has recently published a Virtual Assets Rulebook (VFA). It consists of the regulation of VFA Issuers under the Virtual Financial Assets Act (VFAA).
Opposition by Financial Service Providers
The financial service providers seemed unhappy about the publication of this rulebook. According to them, this rulebook makes matters seem very complicated in terms of cryptocurrencies and blockchain. In an interview, a partner at WH Partners Joseph Borg said that for the book to be effective, the contents of the rulebook needs to undergo several drafts more. He said,
“I strongly suggest to stakeholders to participate in this consultation in order to help the MFSA come up with a well-balanced regulatory framework that is robust and attractive at the same time. It is clear that some things published in the rule book need to be polished and, in some cases, toned down.”
However, he also said that with some workable solutions, the regulators will take them on board. Moreover, they will also be able to fine-tune the framework according to the responses.
Similarly, another partner at Ganado Advocates Corporate Department Dr Simon Schembri said, “The two consultation papers relative to the first two chapters of the ‘Virtual Financial Assets Rulebook’ provide a well-defined framework for what will constitute the eventual two chapters of the Rulebook”. He further stated,
“There are some issues which merit further discussion with the regulator, and in fact, as interested parties in this space, we have already provided our feedback for relative amendments and clarifications within the time frame of the conclusion of the first consultation period relative to the first chapter.”
According to Schembri, they are presently reviewing the second consultation paper relative to the second chapter. They intend to provide a feedback to the regulator in due course.
Virtual Assets Rulebook
The Malta Government published the Virtual Financial Assets Act on 20 July 2018. However, the government is yet to fix on the date of execution. The Minister for Digital Economy may pass a notice in the Gazette stating the date of execution. The MFSA has proposed the rulebook titled as ‘Virtual Financial Assets Rulebook’. And will divide the rulebook into 3 distinct chapters. The authorities closed the consultation for Chapter on July 31. Meanwhile, the consultation of Chapter 2 will be closed on August 13.