Malta Aligns with Europe’s MiCA Regulations
In a move to align its crypto regulatory landscape with the EU’s upcoming Markets in Crypto-Assets (MiCA) regulations, the Malta Financial Services Authority (MFSA) has opened the floor to public consultation on revisions to the existing framework. This initiative is part of a larger trend, with several EU nations, including France, amending their crypto policies to synchronize with the MiCA standards that are slated to be enforced from December 2024.
Notable Adjustments to the VFA Rulebook
Initially established in 2018, Malta’s Virtual Financial Assets (VFA) rulebook is undergoing substantial modifications to facilitate a smoother transition to the MiCA regulations. Some of the noteworthy amendments include:
- Removal of Systems Audit Requirement: VFA license holders will no longer be obligated to conduct system audits, a move aiming to reduce administrative burdens.
- Updated Capital Requirements: Class 3 and 4 license holders will now have capital requirements of 125,000 and 150,000 euros, respectively.
- Professional Indemnity Insurance Requirement Revoked: The upcoming rulebook has done away with the necessity for professional indemnity insurance.
- Alignment of Outsourcing Requirements: The new provisions update outsourcing prerequisites to resonate with MiCA guidelines.
- Service-Specific Rules Aligned with MiCA: The service-specific rules of MiCA have been integrated into the VFA rulebook to amend requirements applicable to VFA exchanges, order execution, and client suitability.
- Client Categorization and Risk Management Requirements Removed: In a bid to streamline processes, client categorization and several risk management mandates have been eliminated.
A Strategic Move for Seamless Transition
By choosing to revise its regulatory landscape ahead of the MiCA implementation, Malta positions itself strategically, aiding VFA license holders in a seamless transition to the new EU-wide regulatory framework. This proactive approach, endorsed by regulators in an interview last October, is seen as a step to facilitate the smooth transition to MiCA-oriented laws and secure EU licenses promptly.
Aligning with MiCA: A Growing Trend in the EU
Malta is not alone in this endeavor. France has also initiated amendments to its crypto regulatory guidelines, a testament to the growing trend among EU nations to harmonize their crypto regulations with MiCA before its official enforcement in early 2024. This collaborative approach showcases the EU’s commitment to fostering a unified and robust crypto regulatory environment.
Conclusion
The MFSA’s public consultation period, which remains open until September 29, provides a crucial platform for stakeholders to voice their opinions and suggestions on the proposed changes. As Malta and other EU nations work towards a harmonized crypto regulatory framework, the early alignment with MiCA promises a streamlined and fortified landscape for crypto assets in the region, setting a precedent for collaborative regulatory advancements in the EU.
