Malta, like France and other EU countries, has revised its existing crypto regulatory laws to line with MiCA, which takes effect in December 2024. Malta’s Financial Services Authority (MFSA) has launched a public consultation on reforms to its crypto legislation in order to conform with Europe’s Markets in Crypto-Assets (MICA) regulations, which are due to go into effect in December 2024. The public comment session is open through September 29. The revised rulebook proposes changes to the rules for exchanges, custodians, and portfolio managers in order to align with the European Union’s MiCA. Malta first established its crypto framework in 2018 with Virtual Financial Assets (VFA).
Some of the notable changes with respect to the VFA Rulebook are:
- A systems audit requirement for VFA license holders has been removed by MFSA.
- It was reduced to $133,000 (125,000 euros) for Class 3 license holders and $159,000 (150,000 euros) for Class 4 license holders.
- There was no longer a requirement for professional indemnity insurance.
- According to MiCA, outsourcing requirements have been updated.
- MiCA’s service-specific rules were incorporated into the VFA rulebook, where the exchange requirements, order execution requirements, and client suitability requirements have been amended.
- There are no longer any requirements regarding client categorization.
- The Risk Management and Internal Capital Adequacy Assessment Report requirements have been abolished.
All existing restrictions in the EU states will be replaced by the universal MiCA laws after the MiCA regulations are passed. Malta, as an EU member, had two options: wait 18 months for the MiCA legislation to take effect or alter existing regulations to line with universal EU laws. The regulators opted for the second choice. In an interview in October, the regulators stated that early changes to their existing crypto regulations will assist VFA license holders in smoothly transitioning to MiCA-based laws and obtaining the EU license. Malta’s VFA framework was founded on the concepts of the Markets in Financial Instruments Directive (MiFID), with MiCA drawing numerous principles from the same rulebook. Apart from Malta, France has also revised its existing crypto regulatory standards to coincide with MiCA, which went into force in early 2024.