Practice Areas > Investment Services, Fintech & Capital Markets > Blockchain & ICOs > ICO Licensing > Legal Basis
Legal Basis
A Serious Framework for ICO Licensing
Article 3 of the Virtual Financial Assets Act (‘VFA Act‘) is the legal basis for Malta-licensed Initial Coin Offerings (‘ICOs‘). According to this article, no issuer may offer a ‘virtual financial asset‘ to the public, or apply for a virtual financial asset’s admission to trading on a crypto exchange without having first registered a whitepaper with the Malta Financial Services Authority (‘MFSA‘).
Since a whitepaper may only be registered with the MFSA subject to the fulfilment of certain conditions, in other words, no person may conduct an ICO without the MFSA’s authorisation, which authorisation is issued through the recognition and registration of a whitepaper properly formulated.
The Regulatory Framework
The Regulatory Framework - a Brief Overview
The Law - VFA Act
The Virtual Financial Assets Act is the main act regulating the registration of Malta-licensed ICOs. 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 2
Chapter 2 of the VFA Rulebook issued by the Malta Financial Services Authority (MFSA) deals exclusively with ‘issuers’ of ICOs and sets out detailed information about matters concerning general requirements for issuers of ICO, whitepaper registration requirements, as well as initial and ongoing compliance obligations.
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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 ICO licence application procedure, including:
- Malta Company incorporation and registration
- Drafting of legal opinions on the legal nature of your cyrptocurrency to determine the applicable legal framework
- Collection & preparation of documentation necessary for submission of an ICO licence (registration) application
- Advising and assisting in the drafting of a whitepaper
- Drafting of ICO offering T&Cs
- Assisting in the engagement of Key Functionaries, including VFA Agent, Systems Auditors, Money Laundering Reporting Officers (MLROs), director/s, auditors, and so on
- Guiding through every stage of the whitepaper registration process
- Providing post-registration follow-up assistance, including advising on applicable annual compliance exercises.