Malta Seeks Feedback on Revised Crypto Rules in MiCA Alignment

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 Crypto.com 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With the introduction of MiCA regulations, the current regulations in EU member states will be superseded by the overarching MiCA legislation.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.

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