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Malta Crypto Exchange License
Updated on Monday 23rd March 2020 Rate this article
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Foreign investors who want to set up a cryptocurrency company in Malta and trade virtual money on the international market should observe the regulations for obtaining the crypto exchange license. The Class 4 license is necessary for companies looking to trade digital money in Malta or on foreign markets. In order to understand the requirements for obtaining the crypto exchange license in Malta, we suggest you talk to our team of company incorporation specialists in Malta. They can also handle the registration procedure for all types of companies available in this country.What are the conditions for obtaining the crypto exchange license?
In order to deal with virtual financial assets in Malta, it is necessary to observe the requirements for obtaining the crypto exchange license like the following:
- • a VFA (virtual financial assets) agent needs to be appointed in order to apply for the necessary license;
- • the application needs to be sustained by complete information about the system, applications, security access and by a programme of operations;
- • a declaration made by the VFA agent must sustain the fact that the applicant is qualified for cryptocurrency exchange in Malta;
- • a crypto exchange license is used only for digital money operations and no additional activities.
Knowing the rules for opening a company in Malta, or for obtaining the crypto exchange license will help an entrepreneur establish rapidly the cryptocurrency company in Malta. Feel free to get in touch with our team and find out how we can help in this matter.
Criteria for obtaining the cryptocurrency license
The protection of the future users, the innovation and the reputation will weigh much at the time of application for a crypto exchange license in Malta. The suitability of the applicant is also considered when applying for the mandatory license. We remind that the financial authorities in Malta have recently adopted a set of laws supervising the digital money exchange.
Preventing the market abuse
Cryptocurrency companies in Malta may be exposed to business crimes like insider dealing cases or market abuse and manipulation. It is good to know that MFSA (Malta Financial Services Authority) deals with such cases if the licensee reports the inappropriate activities in the cryptocurrency sector in Malta. If you would like to know more details about how you can open a company in Malta or about the mandatory conditions for getting the crypto exchange license in Malta, we suggest you talk to our team of consultants at any time.
What is a VFA agent?
The VFA agent can be appointed at the time you wish to apply for the crypto exchange license in Malta. He/she can undertake the Financial Instruments Test necessary to determine the nature of the cryptocurrency company whether if it deals with virtual tokens, virtual financial assets, electronic money or other financial tools. The same agent will make sure that the business plan regarding the digital money and the necessary license in this sense are respecting the applicable laws before applying for the needed permit. The MFSA oversees the activities of cryptocurrency companies in Malta and issues the crypto exchange license if all the above-mentioned conditions are entirely respected. It is good to know that the VFA agent will act as an important contact between the applicant and the financial authorities in Malta when applying for the license. He/she will handle the documents with the relevant authorities and will ensure the business will conform with the newly established and accepted regulations for supervising the activities of the companies dealing with cryptocurrency operations in Malta. Moreover, the same agent will have to make a financial report and submit it to the MFSA on a yearly basis. Find out more details about a VFA agent and his/her responsibilities from our team of consultants in Malta.
Fees for obtaining the crypto exchange license in Malta
The application for obtaining the crypto exchange license is subject to a fee of EUR 12,000. Also, for profits of EUR 1 million, a fee of EUR 25,000 is applicable. We remind that the VFA Class 4 license is the most important one and allows an entrepreneur to deal and control the money, the virtual financial assets and the cryptographic keys of an individual involved in digital money businesses in Malta.
Cryptocurrency regulatory framework in Malta
Since November 2018, the cryptocurrency companies in Malta are overseen by the Virtual Financial Assets Act and the Innovative Technology Arrangements and Services Act, with the mention that any cryptocurrency activity falls under the rules of the Maltese financial laws. According to the above-mentioned set of laws, the cryptocurrency is defined as the digital representation which can be traded virtually with the help of specific financial platforms. The virtual money is available for exchange in agreement with the community users of digital money and cryptography around the world as long as it has a legal status. It is good to know that the Maltese government accepts the fact that few of the cryptocurrencies available in the country are supervised by the existing financial legislation, even though there are no particular rules for trading and offering of cryptocurrency in Malta.
What are the provisions of the Virtual Financial Assets Act?
The VFAA or the Virtual Financial Assets Act in Malta provides information about the licensing conditions for establishing the cryptocurrency operations in Malta, plus the rules for ICOs (initial coin offerings). The legal status of a cryptocurrency in Malta is now verified by the Financial Instrument Test (FIT), in order to see if the digital money can be controlled as a financial tool. The test will show if the cryptocurrency can be qualified as a virtual token, a financial instrument or electronic money.
What you need to know about the Malta Digital Innovation Authority Act
The Maltese Digital Innovation Authority is a governmental entity which sustains the blockchain techs with the help of a series of policies. The same authority is entitled to collaborate with foreign countries in matters of virtual currency, the creation and the use of the blockchain technology, meaning that the digital money must be legally registered before used in Malta. We invite you to talk to our specialists and find out how you can register a company in Malta. Feel free to ask any questions about how you can start a business, including the ones involving initial coin offerings in Malta.
What you need to know about the Innovative Technology Arrangements and Services Act
In order to promote the accountability and the transparency of the blockchain technology, the authorities in Malta implemented the Innovative Technology Arrangements and Services Act. The distributed ledger technology enters the discussion because it involves the technologies and applications of the digital money in Malta which need certain approvals from the Maltese government.
Anti-money laundering legislation in Malta
Once the legislation controlling the virtual currency in Malta has been released this year, the Maltese authorities decided on implementing the anti-money laundering rules and regulations. In this case, the Prevention of Money Laundering and Funding of Terrorism Regulations has been recently introduced. This set of laws mentions the fact that any individual who carries out operations involving digital money in Malta will have to apply for a specific license before entering the market. In other words, there is a need for an authorization which is issued by the financial authorities in Malta, in agreement with the specific financial laws in this sense, and entrepreneurs will be licensed under the rules of the Virtual Currencies Act in Malta.
The registration of a cryptocurrency company in Malta
In the case of a company dealing with virtual money on the Maltese market, a limited liability company can be the proper business structure, with respect to the requirements involved. We remind that the Registry of Companies in Malta is in charge of the incorporation of cryptocurrency companies regardless of the origins of the owners. Specific authorizations are issued by the Maltese institutions for limited liability companies.
Please do not hesitate to contact our team of company formation agents in Malta and ask for comprehensive information about how to apply and obtain the crypto exchange license in Malta. The requirements can be entirely explained by our team of advisors at any time.
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