Virtual Financial Assets (Crypto) License Malta
The VFA Act was introduced in 2018 to provide ‘legal certainty’ to the Crypto Currency and Blockchain world. In fact, Malta became the first jurisdiction to offer a comprehensive & fully-AML compliant framework for prospective (i) issuers of a token and (ii) VFA Service Providers.
Prior to entering into the reason as to why entities should pursue a VFA License in Malta, it is worth briefly mentioning the island’s ‘onerous’ application of ‘Virtual Assets’ AML-Legislation.
Whereas the 5th Anti-Money Laundering Directive primarily only covers the ‘intermediation’ between the Crypto and FIAT world [hence regulating only Crypto-FIAT Exchanges and Wallet Providers], Malta certainly provided a comprehensive framework by fully implementing the FATF’s Guidelines [specifically Recommendation 15] through ‘inter alia’
- the usage of the term ‘Virtual Financial Asset’ rather than the EU’s ‘Virtual Currency’ (and this in order to ensure that all Virtual Assets insofar as they do not constitute a digital representation of FIAT or Securities are ‘captured’ under the VFA Act) and;
- ensuring that Crypto-Crypto Exchanges were also licensable entities and subject to AML.
Within this geo-political context, DWP VFA Agent Ltd. has been at the forefront of this pioneering legislation by offering guidance and assistance to all prospective License Holders.
Our duty as the VFA Agent is to act as a gatekeeper and intermediary between the Regulatory Authority (MFSA) and you, the client. Our role is consultancy, advisory & assistance throughout the license application process. We provide our clients with tailored advice. Moreover, our services are both (i) practical and (ii) methodical – ensuring that the application we help you present to the MFSA will meet with their approval.
To this end, our role as VFA Agents includes assistance with any prospective issuance of a License in the following Classes:
VFAA 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.
VFAA 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.
VFAA 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.
VFAA 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.
Who can benefit from our services
The MFSA expects all applicants to demonstrate a certain degree of ‘robustness’ – both vis-à-vis (i) Policies & Procedures and (ii) Governance Frameworks.
In this connection, customers should NOT consider applying for any VFA-Related service UNLESS:
- The Board of Directors is composed of at least three individuals – who will exercise their duties in fulfillment of the ‘Dual Control’ principle;
- The Company intends to establish both physical and fiscal substance here in Malta – together with a place of business & employees.
- The Company is able to demonstrate that all individuals are competent in the field of cryptocurrencies and have a clear understanding of all VFA Regulations (including AML) and any guidance notes issued thereof;
- The Company is solvent and must have in place adequate capital liquidity – which must be in place ‘at all times’.
- There is a clear understanding that the Virtual Financial Assets Act uses traditional financial services legislation as a ‘blueprint’. In fact, most of the rules & regulations are adopted and transposed from MIFID II and the Investment Services Act. Customers should be wholly familiar with these types of regulations especially insofar as any token determination is concerned.
What our Service includes
- Face-to-face Meetings to gain a comprehensive understanding of the Business Model being presented and its practicability;
- Conducting the Financial Instruments Test (where necessary);
- Acting as the formal gatekeeper and ‘liaison’ with the Malta Financial Services Authority and handling all communications thereof;
- Providing assistance, guidance & appreciation of all Policies & Procedures (and where necessary Byelaws) to the MFSA;
- Ensuring that all preliminary frameworks are in line with the rules and regulations of the MFSA’s VFA Rulebook III
Working with us - the process
- Send us an email or give us a call;
- Following preliminary discussions, we will arrange for a meeting in an informal setting;
- We will commence work on the application process;
- Our team will endeavor to obtain all relevant documents from all individuals to ascertain collective integrity, competence, solvency, time-commitment and conflicts of interest [if any];
- A preliminary interview & meeting will be scheduled with the MFSA with the VFA Agent formally presenting the customers to the Authority.
- We will provide a review of all policies & procedures (including bye-laws) and the Business Plan as is necessary;
- The full application is filed to the MFSA (VFA Unit) and communications are maintained between the VFA Agent & Authority;
- A second interview will be scheduled [with key personnel] including an oral by the FIAU of the proposed MLRO;
- Once the entity is in possession of the ‘In principle approval’, the role of the VFA Agent will cease accordingly
Why you should choose us for Virtual Financial Assets (Crypto) License Malta
- At DWP, we are in constant communication with the Relevant Authority.
- We are aware of any changes in Legislation and/or issuance of Sector-Specific Guidance Notes;
- You are involved in the workflow & have maximum transparency of the current status;
- Meetings are on a regular face-to-face basis;
- Our staff is friendly, hard-working and sympathetic to your needs;
- We also offer Corporate Services, Relocation & Registered Office facilities to complement your Licensing application;
- We have engaged Legal Project Managers to help you with all necessary documentation for the application;
- The VFA Agent’s Designated Personnel is composed of a unique mix of skills and abilities (Business, Sales, Accounting, Auditing, Corporate, Legal & Compliance) to gain a proper understanding of the Business Model being presented by your kind selves;
- DWP VFA Agent Ltd. is one of the largest VFA-Specific intermediaries on the island
- All Members of our Staff are accredited and are in possession of the VFA Agent Examination Certification – ensuring competence in the field;
- We have been advising clients since 2018;
- We are aware of the Relevant Authority’s demands and expectations;
- Our individual training is never ending – members of our team are constantly attending courses– ensuring we are always stay one-step ahead of everyone else
What our clients say about our service
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Key Contacts for Virtual Financial Assets (Crypto) License Malta
Frequently Asked Questions about Virtual Financial Assets (Crypto) License Malta
Most certainly. Our team are more than equipped to understand the business model presented – the type of ‘intermediation’ being offered and the corresponding service which would need authorization. We are privy to certain ‘tricks of the trade’ which can help us categorise a license accordingly such as: understanding whether or not you intend to maintain the holding and controlling of client funds.
Whilst, legally speaking, the responsibility to ensure that proper AML/CFT Policies, Procedures & Controls are borne by the MLRO & Compliance Team – we will be more than welcome to provide guidance and references to sector-specific legislation whenever necessary.
Yes, of course, we can assist you to opt for a fast track solution in order to be able to initiate with the trading activities of the company. We have good relationships with Electronic Money Institutions (EMIs) both locally and foreign where it would be possible to open an account within few days.
Most definitely. Our ‘sister entities’ are more than equipped to handle any concerns which might not necessarily be related to the VFA/Crypto-sphere. Just speak to us and we will guide you accordingly.
Yes. We will be more than willing to assist your CFO and provide guidance as to what the Authority might expect.
Throughout courses and seminars, we attended, speakers and lecturers have continuously ascertained that a comprehensive knowledge and understanding of MIFID II regulations is all but impossible. Our advice is to familiarize yourselves with Financial Instruments – since a thorough knowledge would certainly help in the event that the Financial Instrument Test needs to be conducted. It also helps to understand the ‘rationale’ as to how the VFA Act was promulgated in the first place. Finally, a basic appreciation of MIFID II will help you understand what the Relevant Authority will expect vis-à-vis ‘Investor Protection’, Best Execution and Pre/Post Trade Transparency – especially during your on-going obligations with clients.
Yes. Our Legal Project Managers will assist you accordingly with both the list of documentation and formal compilation.
The Moneyval assessment has merely requested that Malta beef up its AML Compliance Obligations – something that was already prevalent in the local Crypto sphere. Moreover, said assessment has highlighted the need to consider more AML implications which is why applying for any VFA License is no easy feat. Insofar as ‘Tax Haven’ status is concerned, Malta is an EU Member State with a bespoke and flexible tax structure which is tailor made to ensure businesses can benefit from the ‘full imputation’ system – a key factor as to why so many businesses consider Malta to be a success!