Practice Areas > Investment Services, Fintech & Capital Markets > Blockchain & ICOs > Crypto Services Licensing
Overview
Whether you operate a crypto exchange, provide crypto wallet services, deal in cryptocurrencies on own account or on behalf of others or simply provide investment advice in relation to cryptocurrencies, Malta offers a one-of-a-kind regulatory framework that achieves legal certainty whilst maintaining investor protection, market stability and regulatory oversight.
The Virtual Financial Assets Act (‘VFA Act’), among the first in the world of its kind, offers certainty to crypto operators with respect to the legal recognition of their services, as well as clarity on matters relating to registration requirements, processes and applicable fees.
Provided that the service provided is in relation to a cryptocurrency that qualifies as ‘Virtual Financial Asset‘ (a new class of cryptocurrencies under Maltese law), you will be able to apply for a VFA Services Licence to carry out any of the eight (8) licensable ‘VFA Services‘.
VFA Services
Types of 'VFA Services'
There are in total 8 types of services licensable under the Virtual Financial Assets Act:
- Reception and 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 – 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.
- Operation of a VFA Exchange – Operation of a DLT-exchange on which only virtual financial assets may be transacted in accordance with the rules of the platform.
Classes of Services
Classes of VFA Services Licences
A person applying for a VFA Services Licence is classified in one of the four categories which determine the requirements of licence holders, as follows:
- Class 1 – Licence holders authorised to receive and transmit orders and/ or provide investment advice in relation to one or more virtual financial assets and/ or the placing of virtual financial assets. Class 1 Licence Holders are not authorised to hold or control clients’ assets or money.
- Class 2 – Licence holders authorised to provide any VFA service but not to operate a VFA exchange or deal for their own account. Class 2 Licence Holders may hold or control clients’ assets or money in conjunction with the provision of a VFA Service
- Class 3 – Licence holders authorised to provide any VFA service but not to operate a VFA exchange. Class 3 Licence Holders may hold or control clients’ assets or money in conjunction with the provision of a VFA Service
- Class 4 – Licence holders authorised to provide any VFA service. Class 4 Licence Holders may hold or control clients’ assets or money in conjunction with the provision of a VFA Service.
Not sure which classes are applicable to your services?
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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 to establish the applicable legal framework;
- Assisting in the drafting of your business plan, financial projections, white papers, and internal policies and procedures;
- Drafting Maltese-law aligned T&Cs to govern the provision of your services;
- Assisting in the identification and appointment of Key Functionaries, such as VFA Agent, Systems Auditor or IT Auditor, Money Laundering Reporting Officers (MLRO), Non-Executive Director/s, Auditors, etc.;
- Guiding through every stage of the licence application;
- Providing post-registration follow-up assistance, including advising on applicable annual compliance exercises.