MFSA Consultation on Virtual Currencies


Virtual currencies, such as Bitcoin, have taken the investment world by storm over the past 12 months with an ever increasing market capitalisation. In the light of these developments, Malta is getting closer to introducing laws for cryptocurrencies, making the country among the first jurisdictions to set up this framework.

The Malta Financial Services Authority has recently conducted a consultation on the proposed regulation of collective investment schemes investing in virtual currencies. In a feedback statement issued on 22nd January 2018, the MFSA shared the various suggestions received following the consultation and explained its position taken on investment schemes for virtual currencies.

In its feedback statements, the MFSA has made it clear that only qualifying investors will be allowed to take part in virtual currency-related collective investment schemes, with SICAV, INVCO, limited partnerships and unit trust structures all granted access to such schemes. In definition, a collective investment scheme is a vehicle that invests capital acquired through the sale of shares in a scheme. In virtual currencies, any such scheme created through Initial Coin Offerings will be considered to be a ‘direct’ investment.

Rules for professional investor funds investing in virtual currencies will be included as a supplement to existing rules, rather than as a standalone rulebook. Stakeholder requests to relax the competence requirements were waved off by the financial regulator, pointing out that relevant courses and qualifications related to virtual currencies are already available worldwide. It added that auditors employed to assess such schemes will need to have the necessary competence to look into blockchains.

The MFSA statement forms part of its ongoing assessment of how to regulate virtual currency markets, exchanges and ICOs.