Malta became the first jurisdiction worldwide to regulate cryptocurrency in 2018. It signalled the dawn of a new financial edge for the country. But things may be taking a dark turn these days, according to reports.
Malta is known as a disruptive force due to its open tax regime and open-door policy to cryptocurrencies. The Malta Financial Services Authority (MFSA) is the single regulator of financial services. It plays a huge role in ensuring it has the most promising cryptocurrency and blockchain based pieces of legislation. For the uninitiated, the MFSA handles the functions of the central bank, stock exchange and financial services centre. It is a one-stop-centre that is also responsible for regulating ‘virtual financial assets’. Back in 2018, its notable blockchain bills were namely the “Malta Digital Innovation Authority Bill”, “The Technology Arrangements and Services Bill” and the “Virtual Financial Assets Bill”. The bills ensured proper regulations for Initial Coin Offerings (ICOs), domestic and international cryptocurrency exchanges too.
As of now, there are 20 entities registered under Malta’s Virtual Financial Assets (VFA) Act and it seems many more companies are queuing up to apply for local licenses by the MFSA. “ICO Launch Malta” has raised over €1.1 billion on its security token offerings (STO) platform. “Exante” is another notable entrant that offers users to access more than 50 of the world’s financial markets via its web trading program. According to statistics back in 2018, Malta was the no.1 country in trading volume despite only being the 24th in terms of actual numbers of cryptocurrency exchanges.
Recently, the Prime Minister of Malta, Joseph Muscat, the man behind the trailblazing policies in blockchain, gaming and AI, stepped down from his position. It was due to the crisis involving the murder of investigative journalist Daphne Caruana Galizia, that began to rock the nation’s political scene. According to reports, Malta’s blockchain dream was already taking a turn for the worse, as the PM took a lot of heat for his “cash for passports” programs. These were grants for foreign business people that included citizenships, which basically gave them EU citizenship and also how the political elite were linked to the Panama papers too.
“Malta is set to become the Bitcoin money-laundering capital of this part of the world—and preparations are already being made for it,” Galizia wrote, on news of the island’s plans to become a leader within the cryptocurrency industry. “Whoever has a vested interest in the heightened use of cryptocurrencies is already [funneling] money into the Labour Party and a couple of Panama companies, and calling the shots.”
Her son, Mathew, also an investigative journalist, said that Malta is like a modern-day pirate haven that is empowered with technology. It’s all about governmental patronage and clan-based networks, in his opinion, that points to a massive organized crime network. The International Monetary Fund and the EU’s regulatory body, the European Commission is on the case. They want Malta to clean up its act and have anti-money laundering policies that match the growth in financial services the world over. So just how will things pan out in the future? As they say, only time will tell.
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