Initial Coin Offering in Malta

Initial Coin Offering in Malta

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Initial Coin Offerings (ICOs) is a method where a company looking to raise capital can sell cryptocurrency to investors in the form of tokens. CSB Fintech provide expert advice on ICO Regulations and Compliance matters and assist clients who wish to launch a token sale.

Establishment of ICOs in Malta

The Virtual Financial Assets Act, was enacted on the 1st November 2018 and the subsequent chapters to the Virtual Financial Assets Rule Book were issued. In relation to Initial Coin Offerings (ICOs) the Malta Financial Services Authority published a specific chapter in relation to Issuers of Virtual Financial Assets, establishing Malta as one of the pioneers of ICO Regulations.

The ICO Requirements

Chapter 2 to the Rulebook specifically targets those who seek to raise finance through the issue of Virtual Financial Assets (ICOs) in or from Malta. The law states that an issuer must be a legal person, which is duly formed in Malta, and that it must adhere to the principles laid out in the law as well as the Rulebook. The law and Rulebook put a great emphasis on the fact that such issuers must at all times uphold the principles of market integrity, investor protection, and financial soundness.

Malta ICO Setup

  1. Applicant to undertake the Financial Instrument Test;
  2. Drawing up of the Whitepaper & Smart Contract parameters.

Any Issuer must determine whether its token is a Utility Token, Security Token, E-money or a Virtual Financial Asset. 

The Issuer would need to form a legal entity in terms of the Laws of Malta and shall be directed by two (2) individuals. This requirement is enshrined to ensure the dual control principle. The individuals are responsible in ensuring that the Issuer complies with the laws and rules, abiding by all ICO regulations.

Such persons need to be both on a collective and individual basis of sufficient knowledge of the business of the Issuer and also monitor the activities of the company if they form part of the Board of Administration (Board of Directors). If the BoA delegates any functions, it holds ultimate responsibility.

An Issuer shall appoint and have at all times:


Any legal entity on the Island of Malta needs to appoint a local Auditor in order for it to be in a position to carry out an annual assessment on the financial performance of the company. Moreover, in respect to ICOs, an auditor shall also draw up a report wherein it confirms that the ICO has proper Anti-Money Laundering, Know Your Client Procedures & Systems in place.


The law requires that an Issuer of an ICO appoints an anti-Money Laundering Reporting Officer. Such individual must possess the necessary competence, experience and knowledge in the field as well as a similar good grasp in relation to traditional financial services legislation.


Can be undertaken through the Innovative Technology Arrangement (ITA) for Virtual Financial Assets. Traditional FIAT currencies are to be held under custody by traditional banks, central banks, EMIs or money market funds.

Application Documents

Before submitting an application, a meeting should be held with the MFSA. Following that the below listed documents are to be submitted to the MFSA:

  1. Whitepaper & supplementary documentation duly signed;
  2. Copy of VFA Test duly signed by Board;
  3. Confirmation from Systems Auditor regarding the Technology Arrangement in accordance with MDIA guidance;
  4. Copy of last three years audited financial statements;
  5. Consolidated Group account of last 3 years prepared in accordance to GAAP (if applicable);
  6. Certified copy of M&A (or similar);
  7. Application Fee.

The MFSA may request additional information and applications are accepted or rejected at its discretion. No Application is accepted if not made with the consent of the Issuer. The MFSA shall rely on the determinations of the Issuer.

Limitations on Investment

An Issuer will ensure that an investor who does not satisfy the requirements of being an Experienced Investor shall not invest more than €5,000 in an Issuer’s ICO over a twelve (12) month period.


White Paper Registration Fees€8,000
Whitepaper Annual Supervisory Fee€2,000

Ongoing Requirements

AML Requirements

The Issuer shall ensure that it is at all times satisfying the local Anti-Money Laundering and Counter-Financing of Terrorism requirements. The MLRO of the Issuer is to prepare such a statement on an annual basis and form part of the Compliance Statement to be submitted by the Issuer.

Annual Filings

An Issuer shall on an Annual basis submit to the MFSA the following documentation:

  1. Audited Financial Statements;
  2. Auditors Report;
  3. Annual Compliance Statement.

Document Maintenance

The Issuer shall maintain records and documents for a period of not less than five (5) years and at the MFSA’s request may need to hold such for up to seven (7) years. Such documentation must be made readily available to the MFSA in its role to monitor the Issuer’s compliance.

The Information must be maintained in a medium which allows storage in an accessible manner and must allow:

  1. MFSA to access and reconstitute each key stage of a transaction;
  2. Corrections and amendments to be easily ascertained;
  3. The non-manipulation of records.

Innovative Technology Arrangements

The Innovative Technology Arrangements shall at all times satisfy the guidelines issued by the MDIA. 

I.T. Infrastructure

I.T. infrastructure must ensure (in accordance with GDPR):

  1. Integrity & security;
  2. Availability, traceability & accessibility;
  3. Privacy & confidentiality.

Infrastructure to be located in Malta or any EEA Member State or Third Country approved by MFSA. If not in Malta, replication in real-time must be made in Malta.

Regulated Information

    1. Regulated Information shall be submitted to MFSA at the same time that it is disclosed to the public at no fee to investors;
    2. Information must be published in the media in unedited full text, unless information given to the media makes reference to a website;
    3. Regulated Information shall be communicated:

    a. Clearly stating that it is Regulated Information;

    b. Clearly identifies:

    • The issuer;
    • Subject matter;
    • Time & Date of communication.

Penalties & Sanctions

A fine of up to €150,000 may apply for breaches by an Issuer in relation to the Rules. The MFSA is granted to issue such a penalty and the Issuer  shall not have recourse in a court of law. Higher fines and penalties may be imposed if the matter is subject to a court of law.

Key Contacts

Franklin Cachia

Director & Lead Consultant

Kyle Scerri

Senior Manager - Legal



CSB Group have been loyal partners to our development-stage medical technology company. CSB provides local oversight to our Malta subsidiary that is thorough and compliant. As a result, we have the confidence that a successful development project should yield maximum value for our shareholders.

Fred McCoy


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We at Staern Ltd are glad that we work with CSB Group. Experienced, dedicated and supportive specialists. People you can rely on even in very complex business challenges such as VFA Licence application. People you can trust. People who can motivate and continue to go forward even in very complex business challenges. We are very glad to work with CSB Group on our VFA Service Provider Licence.

Staern Ltd


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