After a much-anticipated wait, the Maltese Government has published three Bills aimed primarily at: 1) Regulating Virtual Financial Assets, 2) Establishing a Malta Digital Innovation Authority and 3) Regulating designated innovative technology arrangements/services.
Whilst Dr. Werner & Partner will be analysing in detail the contents of each Bill [in future articles], it is imperative that clients are introduced to these future laws which as stated by Parliament Secretary Dr. Silvio Schembri are ‘the first of their kind not just for Malta but also on an international level.’
Virtual Financial Assets Act.
It goes without saying that the most important document published is the: ‘Virtual Financial Assets Act, 2018’ which will shortly become enshrined in Malta’s legal system. This Act is aimed at: ‘regulating the field of Initial Virtual Financial Asset Offerings’ (ICOs) and ‘Virtual Financial Assets’.
The Preliminary Part of the Act will contain several important definitions which will be explained in another blog but inherently guarantee ‘legal certainty’ – as there are now clear and concise definitions for important day-to-day terms such as: ‘Distributed Ledger Technology’, ‘Initial Virtual Financial Asset Offering’ and ‘Virtual Financial Asset’.
Clients and Crypto-enthusiasts will certainly be eager to delve into the details of initial VFA offerings particularly the proposed ‘Whitepaper’ which will serve as a form of ‘Guidelines’ for entrepreneurs willing to primarily pursue an ICO endeavour.
What is also important to gauge at this point in time is that the ‘Competent Authority’ tasked with overseeing the implementation of licenses, ICOs and rules governing VFAs will be the ‘Malta Financial Services Authority’ and pursuant to Article 47 of the Act, the MFSA ‘shall introduce a test for the purpose of determining whether a DLT asset qualifies as electronic money, a financial instrument, virtual financial asset or Virtual token….’
Establishing the Malta Digitial Innovation Authority (MDIA).
The Second Act will be titled: ‘The Malta Digital Innovation Authority Act, 2018’. This Bill provides for the ‘establishment of an Authority which will be known as the Malta Digital Innovation Authority aimed at primarily ‘promoting consistent principles for the development of visions, skills, and other qualities relating to technology innovation.’
The Authority will be tasked with a number of duties such as: ‘regulating, monitoring and supervising the provision of such innovative technology arrangements’, ‘regulating innovative technology products’, ‘establishing minimum quality, compliance and security standards for innovative technology arrangements’ and ‘supporting innovation in the development and use of innovative technology arrangements’. The most important function of this Authority will be the power to grant or refuse an innovative technology Authorisation – as seen in Article 27 of the Bill.
TAS Act & Smart Contract Regulation.
Finally, the ‘Innovative Technology Arrangements and Services Act, 2018’ will provide for the regulation of designated innovative technology arrangements’. This Bill outlines the role of important personnel such as: service providers, system administrators and system auditors.
Moreover, as seen in the First Schedule of the Act, Innovative Technology Arrangements shall include: ‘software and architectures which are used in designing and delivering Distributed Ledger Technology [e.g. Blockchain Tech.], Smart Contracts and any other Technology Arrangement.
Here at Dr. Werner & Partner, our qualified personnel will be more than willing to explain these Bills in detail and help you draw up your business plans/proposals accordingly. You can contact us accordingly to discuss any ICO or Blockchain-related project or idea by sending an email to: firstname.lastname@example.org.
Disclaimer: The above-mentioned article is simply based on independent research carried out by Dr. Werner and Partner and cannot constitute any form of legal advice. If you would like to meet with up with any of our representatives to seek further information, please contact us for an appointment.