Malta is making significant strides in realigning its crypto regulatory landscape with the upcoming Markets in Crypto-Assets (MiCA) regulations. This move is in line with the broader European Union (EU) initiative, set to take effect in December 2024.
Public Consultation on MiCA Alignment Initiated
Malta’s Financial Services Authority (MFSA) has initiated a crucial phase in this transformation by opening a public consultation period. This allows stakeholders and the public to provide their insights and feedback on the proposed changes to crypto regulations. The consultation period is open until September 29, creating a window for meaningful contributions.
Streamlined Rules for Exchanges and Custodians
One of the notable changes proposed in the revised rulebook is the removal of the systems audit requirement for Virtual Financial Assets (VFA) license holders. This alteration aims to reduce administrative burdens and streamline the compliance process for crypto businesses in Malta.
Additionally, the capital requirements for Class 3 and 4 license holders have been adjusted to $133,000 (125,000 euros) and $159,000 (150,000 euros), respectively. This makes it more accessible for emerging players in the crypto space.
In a bid to enhance regulatory efficiency, Malta has also eliminated the professional indemnity insurance requirement. Also, it has updated outsourcing requirements to align with MiCA standards. This adjustment fosters a more flexible regulatory environment for crypto businesses while maintaining the necessary oversight.
Incorporation of MiCA Principles
Malta’s adaptation to MiCA goes beyond aligning with its core principles. The service-specific rules of MiCA will be incorporated into the VFA rulebook. This means that requirements applicable to VFA exchanges, order execution, and client suitability will undergo amendments to ensure compliance with MiCA regulations.
Additionally, the previous requirements related to client categorization and the Risk Management and Internal Capital Adequacy Assessment Report have been removed. This streamlined the regulatory framework further.
Malta’s Strategic Choice and France’s Parallel Move
As an EU member state, Malta had two options in response to MiCA regulations. One is waiting for 18 months for MiCA laws to come into effect or proactively amending existing regulations to align with the universal EU laws.
Malta’s regulators chose the latter option, demonstrating their commitment to providing a conducive environment for crypto businesses and facilitating a smooth transition to MiCA-based regulations.
It’s noteworthy that Malta is not alone in this endeavor. Fellow EU nation France has also taken steps to align its existing regulatory guidelines for crypto with MiCA. France’s alignment process is set to be completed by early 2024, reflecting the broader trend of EU nations preparing for the implementation of MiCA regulations.
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