On 20th July, Malta marked a new milestone by designing an innovative suite of legislation targeting blockchain. Three new legislative acts, featuring a well-matched intersection of law and technology, were enacted, re-confirming the important role which Malta is playing in this field. The Malta Digital Innovation Authority Act has established a new specialised authority, responsible for the certification and supervision of technology arrangements (including DLT platforms) and relating service providers who voluntarily apply for registration under the Innovative Technology Arrangements and Service Act. Certification shall translate into a seal of approval will be awarded on the basis of a number of conditions outlined in the same act.
The novel Virtual Financial Assets Act (“VFAA”) regulates the offering of virtual financial assets, more commonly known as “ICOs”, through a new licensing regime featuring on-going obligations for ICO-issuers or ancillary service providers to an ICO, if the issue or the service in question is provided in or from Malta. Maltese Parliament was also a first mover in introducing a ‘financial instrument test’ which will be used in the determination whether a DLT asset qualifies as electronic money, a financial instrument, virtual financial asset or virtual token. Furthermore, the current wild west of disclosure-trends in ICO whitepapers being published is now going to being stabilised through the disclosure obligations under the VFAA. The new law will bring standardisation to this novel market, thereby decreasing the information asymmetry between investors and ICO-issuers.
Malta, the Mediterranean dark-horse in blockchain regulation, was one of the few countries, on a global scale, with the legal and economic foresight to provide a non-intrusive regulatory solution to a delicate market which yearns for certification of quality. The new laws will come into force on a date established by the responsible Minister and will be published in the government Gazette.