A Guide to Anti-Money Laundering for Crypto Firms

Malta Cryptocurrency Regulation

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Is Cryptocurrency Legal in Malta?

  • Cryptocurrencies: Not legal tender
  • Cryptocurrency exchanges: Legal, regulated under the VFA Act

Malta has taken a very progressive approach to cryptocurrencies, positioning itself as a global leader in crypto regulation. While cryptocurrencies are not legal tender in Malta, they are recognized by the government as “a medium of exchange, a unit of account, or a store of value.” To complement existing AML/CTF legislation, the Maltese government was the first to enact a trio of digital assets-related acts (MDIA, ITAS and VFA), along with blockchain legislation. Malta cryptocurrency regulation doesn’t include a specific tax legislation nor is VAT currently applicable to transactions exchanging fiat currency for crypto.
Malta Cryptocurrency Regulation

Cryptocurrency Exchanges

Cryptocurrency exchanges are legal in Malta and in 2018 the Maltese government introduced landmark legislation that defined a new regulatory framework for cryptocurrencies and addressed AML/CFT concerns. This Malta cryptocurrency regulation comprised several bills, including the Virtual Financial Assets Act (VFA) which set a global precedent by establishing a regulatory regime applicable to crypto exchanges, ICOs, brokers, wallet providers, advisers, and asset managers.

The VFA regulations (effective November 2018) were accompanied by the Innovative Technology Arrangements and Services Act which established the regime for the future registration and accountability of crypto service providers. The Malta Digital Innovation Authority was also established: the MDIA is the government authority responsible for creating crypto policy, collaborating with other nations and organizations, and enforcing ethical standards for the use of crypto and blockchain technology.

Future Malta Cryptocurrency Regulations

No new AML or crypto legislation is currently on the horizon but the Malta Financial Services Authority (MFSA) has indicated in its strategic plan for 2019-2021 that the country’s financial services regulator “will actively monitor and manage business-related risks pertaining to licensed virtual assets and cryptocurrency businesses” in order to better address money laundering and other financial crime risks. The Maltese government has also indicated that it will focus on the integration of AI with cryptocurrency regulation and may implement specific guidelines for security token offerings. With those strategies in mind, additional Maltese regulations are likely in the near future.

Complying with Malta Cryptocurrency Regulations

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