Practice Areas > Investment Services, Fintech & Capital Markets > Blockchain & ICOs > The VFA Act
Overview
The enactment of the ‘Virtual Financial Assets‘ Act (the ‘VFA Act‘) in November 2018 marked Malta’s rise to prominence as a leading blockchain jurisdiction intent on promoting the scalability of distributed ledger technology whilst ensuring a sufficient degree of investor protection and regulatory oversight.
A part of Malta’s cutting-edge trident of blockchain laws, the VFA Act, the Innovative Technology Arrangements & Services Act (‘ITAS Act‘) and the Malta Digital Innovation Authority Act (‘MDIA Act‘) complement each other in the attainment of a comprehensive technology-neutral blockchain regulatory framework.
The VFA Act
What does the VFA Act Regulate?
The VFA Act sets out the framework regulating the provision of the following services:
- ‘Initial Virtual Financial Asset Offerings’ (commonly known as Initial Coin Offerings or ICOs) – The issue of ‘virtual financial assets’ in or from within Malta
- Admission of VFAs to Trading – The application for admission of VFAs to trading on distributed ledger technology-based exchanges
- Reception & Transmission of Orders – The reception from a person of an order to buy, sell or subscribe for virtual financial assets and the transmission of that order to a third party for execution
- Execution of Orders on Behalf of Other Persons – Acting to conclude agreements to buy, sell or subscribe for one or more virtual financial assets on behalf of other persons
- Dealing on Own Account – Trading against proprietary capital resulting in conclusion of transactions in one or more virtual financial assets
- Portfolio Management – Managing or agreeing to manage assets belonging to another person if those assets consist of or include one or more virtual financial assets or the arrangements for their management are such that the person managing or agreeing to manage those assets has a discretion to invest any of those assets in one or more virtual financial assets
- Custodian or Nominee Services (such as Wallet Service Provider) – Acting as custodian or nominee holder of a virtual financial asset and, or private cryptographic key
- Investment Advice – Giving, offering or agreeing to give, to persons in their capacity as investors or potential investors or as agent for an investor or potential investor, a personal recommendation in respect of one or more transactions relating to one or more virtual financial assets
- Placing of Virtual Financial Assets – The marketing of newly-issued virtual financial assets or of virtual financial assets which are already in issue but not admitted to trading on a DLT exchange, to specified persons and which does not involve an offer to the public or to existing holders of the issuer’s virtual financial assets
- VFA Exchanges – The operation of a VFA exchange (both fiat-to-crypto and crypto-to-fiat; as well as crypto-to-crypto exchanges).
Read the Law
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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, 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 the applicable licence application
- Advising and assisting in the drafting of a whitepaper or business plan
- Drafting of token 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
- Providing post-registration follow-up assistance, including advising on applicable post-licensing obligations.