Practice Areas > Investment Services, Fintech & Capital Markets > Blockchain & ICOs > Crypto Exchange Licensing > Legal Basis
Legal Basis
A Serious Framework for Crypto Exchange Licensing
Article 13 of the Virtual Financial Assets Act (‘VFA Act‘) is the legal basis for Malta-licensed Crypto Exchanges. According to this article, no person may operate a ‘VFA Exchange‘ in or from within Malta unless such person is in possession of a valid licence issued by the Malta Financial Services Authority (‘MFSA‘).
‘VFA Exchange‘ is the legal term for distributed ledger technology-based exchanges operating in or from within Malta on which only Virtual Financial Assets (VFAs) may be transacted. This means that for a crypto exchange to be eligible for a licence issued under Malta’s blockchain laws, it must ensure that only cryptocurrencies qualifying as ‘VFAs’ under Maltese law are transacted.
The Regulatory Framework
The Regulatory Framework - a Brief Overview
The Law - VFA Act
The Virtual Financial Assets Act is the main act regulating the licensing of Malta-based crypto exchanges. It sets out high level principles of recognition and registration.
The Subsidiary Legislation - VFA Regulations
The VFA Regulations regulate aspects concerning applicable application and supervisory fees as well as matters concerning the safeguarding of client assets and funds (including cryptocurrencies).
The Rules - VFA Rulebook, Chapter 3
Chapter 3 of the VFA Rulebook issued by the Malta Financial Services Authority (MFSA) deals exclusively with ‘VFA Service Providers‘, including operators operating a VFA (Crypto) Exchange. Chapter 3 of the VFA Rulebook sets out detailed information about matters concerning general authorisation requirements for VFA Service Providers, the licensing process, processes for appointed persons and Key Functionaries, as well as post-licensing ongoing obligations. Crypto exchanges are subject to certain supplementary conditions.
Read more
Next
How we can help
Gonzi & Associates, Advcocates, has extensive experience in this field and is able to provide specialised assistance to your business at all stages of the Malta Crypto exchange licence application procedure, including:
- Malta Company incorporation and registration;
- Drafting of legal opinions on the legal nature of your service and technology employed to determine the applicable legal framework;
- Collection & preparation of documentation necessary for submission of an Malta crypto exchange licence application, including internal policies;
- Assistance in the drafting of the company’s business plan for submission with the licence application;
- Drafting website T&Cs relevant to your services;
- Assisting in the engagement of Key Functionaries, including VFA Agent, Systems Auditors, Money Laundering Reporting Officers (MLROs), director/s, auditors, and so on;
- Providing post-registration follow-up assistance, including advising on applicable annual compliance exercises;
- Registration of your trade mark in the Malta trade mark register and the register of the European Union Intellectual Property Office as necessary;
- Providing general legal advice and assistance as required.