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Malta aligns new crypto rules with MiCA; public consultation begins



Malta, following the lead of France and other EU nations, is revising its crypto regulatory policies to align with the Markets in Crypto-Assets (MiCA) framework, scheduled for implementation in 2024.

The Malta Financial Services Authority (MFSA) is actively seeking public input on its crypto regulations. It aims to update these regulations to align with the Markets in Crypto-Assets (MiCA) regulations set to take effect in the European Union in December 2024. The consultation period will remain open until September 29, 2023.

Malta’s revised crypto rulebook proposes changes to the existing Virtual Financial Assets (VFA) regulations, which Malta established in 2018. The changes aim to harmonize Malta’s rules with the European Union’s MiCA framework, covering areas such as exchanges, custodians, and portfolio managers.

The MFSA has proposed several changes to the VFA Rulebook, including:


  • They will remove the system’s audit requirement for VFA license holders.
  • They will reduce the capital requirements for Class 3 and 4 license holders to €125,000 and €150,000, respectively.
  • They will eliminate the professional indemnity insurance requirement.

They will update the outsourcing requirements by MiCA.

  • The VFA Rulebook incorporates MiCA-specific rules, which entail changes to the requirements for VFA exchanges, order execution, and client suitability.
  • They are removing the client categorization requirements.
  • They are eliminating the requirement for Risk Management and the Internal Capital Adequacy Assessment Report.

Following the European Union’s passage of the MiCA regulations, EU member states must ensure that their existing crypto regulations align with the new EU-wide rules. Malta, as an EU member, faced a choice between waiting for the MiCA regulations to come into effect after 18 months or amending its existing laws to meet the new requirements. Ultimately, regulators opted for the second option.

However, in a previous interview in October of last year, the regulators explained that amending the country’s existing crypto regulations early on would facilitate an easier transition for VFA license holders to the MiCA-based laws and obtaining the EU license. Malta’s VFA framework was based on the Markets in Financial Instruments Directive (MiFID), and the MiCA regulations also stemmed from this same rulebook.

In addition to Malta, France has also updated its regulatory framework for crypto to align with the upcoming MiCA regulations, which will take effect in early 2024.

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