It has become a well-known fact that Malta is aiming to be a leader in regulating Distributed Ledger Technology (DLT), cryptocurrencies and ICOs. In fact, three new laws regulating this area have been proposed and presented to the Parliament and should be made public in the coming days. As a law-firm offering legal services to ICOs, crypto-exchanges and crypto-related projects, we have seen a surge in the interest in Malta as the ideal jurisdiction for such projects. This may be a result of a country’s clear vision and progress being made in such industry as well as other advantages which Malta already offers.
Investors tend to appreciate how Malta is one of the few European countries having a clear mindset willing to regulate this new industry. Other countries are taking a step back when it comes to DLT, blockchain and cryptocurrencies. On the contrary, Malta offers certainty to investors knowing that as a country it is aiming to attract investors interested in the area of digital innovation. Whereas other countries seem to be frowning upon cryptocurrencies and blockchain, Malta has declared that it would like to encourage investors to invest in Malta and attract business in this industry and it aims to be one of the first to enter this market. This has led to Malta gaining much of the attention, which could serve as an advantage for ICOs using Malta as their jurisdiction to attract investors to their project.
The first step in launching a crypto-related project in Malta would be the financial instrument test where the token in question will be assessed as to whether it qualifies as a financial instrument, a utility token or as a DLT asset which is neither of the two, which would then be referred to as a virtual financial asset. The financial instrument test will enable lawyers to determine whether the token requires licensing under either MiFID II or other existing financial regulation, or under the new proposed law, the ‘Virtual Financial Assets Act’. The proposed laws which will regulate DLT platforms, smart contracts, cryptocurrencies and establishing a central digital innovation authority will eradicate the legal uncertainty which surrounds the whole industry.
Choosing Malta as the jurisdiction for your next crypto-related project means benefitting from highly skilled and qualified personnel in the industry of DLT and cryptocurrencies, both on a trading and operations level and also from an IT point of view. Salaries and statutory bonuses are relatively lower than other European jurisdictions, thereby providing the company with a cost-efficient highly qualified workforce. Since Malta has been attracting business in such industry, the vast majority of service providers located in Malta have gained extensive experience and knowledge in the sector which could result in better service for your next project. Besides legal services from law-firms such as ours, where we have been involved in several other crypto-projects, IT services, marketing services and banking solutions can all be found in Malta with high-standards of knowledge and experience.
Zerafa Advocates is a law-firm based in Malta and we would be glad to assist in your next ICO, crypto-exchange or crypto related project.