Malta Seeks Feedback on Revised Crypto Rules in MiCA Alignment

Simar Marwaha
Simar Marwaha Published on September 18, 2023 09:32 PM

Malta's Financial Services Authority (MFSA) Initiates Public Consultation on Proposed Crypto Regulation Updates Beginning Monday.

Malta Seeks Feedback on Revised Crypto Rules in MiCA Alignment
Source: Forbes

The Malta Financial Services Authority (MFSA) has commenced a public consultation process to adapt its cryptocurrency regulations by the upcoming European Markets in Crypto-Assets (MiCA) regulations, slated for implementation in December 2024.

The public consultation will remain open for feedback until September 29th. The proposed amendments to the regulatory framework pertain to exchanges, custodians, and portfolio managers, aimed at aligning Malta's cryptocurrency regulations with the European Union's MiCA framework.

The regulator is revising regulations for exchanges, custodians, and portfolio managers to conform with the guidelines outlined in the European Union's Markets in Crypto Assets regulation.

Malta Prepares Crypto Rulebook for MiCA Compliance

Additionally, it is proposing that cryptocurrency service providers be mandated to establish a comprehensive plan for an organized cessation of operations.

MiCA, which takes effect in 2024, represents the world’s first comprehensive crypto regulation in a major jurisdiction, allowing service providers to operate across the bloc with a single license. As an EU member, Malta wants to align its crypto rules with MiCA and "ensure a smooth transition for Virtual Financial Assets (‘VFA’) Service Providers" in the country, the regulator said in its consultation.

Malta, similar to countries like France, boasts a relatively advanced legal framework that aligns with EU standards. It is also a hub for cryptocurrency companies such as and OKCoin. The consultation period will remain open until September 29th.

Some of the notable changes concerning the VFA Rulebook are:

  1. The MFSA has removed the systems audit requirement for VFA license holders.
  2. The capital requirements for Class 3 and 4 license holders were reduced to $133,000 (125,000 euros) and $159,000 (150,000 euros), respectively.
  3. The professional indemnity insurance requirement was removed.
  4. The outsourcing requirements were updated in line with MiCA.
  5. The service-specific rules of MiCA were incorporated into the VFA rulebook, where the requirements applicable to VFA exchanges, order execution and client suitability will be amended.
  6. The requirements relating to client categorization have been removed.
  7. The requirement for Risk Management and the Internal Capital Adequacy Assessment Report has been removed.

With the introduction of MiCA regulations, the current regulations in EU member states will be superseded by the overarching MiCA legislation. Malta, as an EU member, faced a choice: either wait for 18 months until the MiCA laws take effect or modify its existing regulations to harmonize with the pan-European legislation. The regulatory authorities opted for the latter option.


JPEX, A Cryptocurrency Exchange, Suspends Trading Amid A Hong Kong Investigation


GSR, A Provider Of Cryptocurrency Liquidity, Has Regulatory Permission In Singapore
GSR, A Provider Of Cryptocurrency Liquidity, Has Regulatory Permission In Singapore
October 03, 2023 01:29 AM