- The by the MFSA change of attitude is due to the political transformation of the recent resignation of Maltese Prime Minister Joseph Muscat following the entrance of his replacement.
- During the speech at the United Nations General Assembly, the Prime Minister of Muscat determinedly pointed his country as a blockchain island.
One of the leading financial regulators MFSA from Malta comes up with an unpredictable testimonial about the leading brand in cryptocurrency exchange Binance.
The so-called statement was published by cointelegraph.com on February 29 saying “Binance is not authorized to function in the cryptocurrency arena” depicted by the press release of the regulator.
Though Binance was maintaining a close relationship with the local authorities, the following statement was released by the officials last week showing a breakdown in the relations between the cryptocurrency sector and Maltese officials.
The Malta Financial Services Authority (MFSA) change of attitude is due to the political transformation of the recent resignation of Maltese Prime Minister Joseph Muscat following the entrance of his replacement. This, in result, started experiencing difficulties for the cryptocurrency industry. However, the new government has reaffirmed its plan to operate Malta as a blockchain island.
During the speech at the United Nations General Assembly, the Prime Minister of Muscat determinedly pointed his country as a blockchain island. Before this announcement, the government had approved three crypto-related bills; the Digital Innovation Authority Act, Virtual Financial Asset Act, and the Innovative Technological Arrangement and Services Act. These bills were sanctioned to form a strong and transparent governing ecosystem.
At that time Binance as retaining good relationships with the Maltese government. After the news of Binance’s interest in Malta was published on Bloomberg, the Prime Minister of Muscat personally greeted the exchange with one of the social media platforms. In return for which the Binance CEO Changpeng Zhao, also known as CZ, replied that he was hopeful about all the prospects for crypto in Malta.
In October 2018, the Maltese government signed a declaration to endorse blockchain usage along with seven other European countries. On November 1, the three aforementioned blockchain laws came into effect which caused the local authorities to experience difficulties.
These three laws, also known as the VFA act, became mandatory for the businesses while conducting their ICO. They have to get licensed by the Malta Financial Services Authority (MFSA). However, it’s been a year since this law has been introduced; no businesses have been licensed under the VFA context till now.
Cryptocurrency Regulation in “Blockchain Island”
An OKEx spokesperson confirmed that crypto startups in Malta are still struggling to acquire financial services due to the sluggishness of governing authorities.
Apart from imposing Anti-Money Laundering and Know Your Customer policies by VFA Framework, one more policy was induced by them, namely the EU’s AMLD5 directive.
On February 21, 2020, surrounded by the hesitant VFA framework, the MFSA released a public statement, announcing that Binance is not authorized to operate in the cryptocurrency sphere by the MFSA. The agency clarified that the media is misleading Binance as “Malta-based cryptocurrency firm,” the exchange does not come under the monarchy of governing supervision.
Though the current Prime Minister Abela still has to remark on blockchain and cryptocurrencies publicly, the new government is interested and yet in a practice of creating Malta as a blockchain island. Thus, it has not been officially declared by the Maltese government about their perception of the crypto industry. For now, the regulators are consulting for its crypto-related initiatives with the top businesses of their country.