{"id":6805,"date":"2018-04-16T07:53:15","date_gmt":"2018-04-16T07:53:15","guid":{"rendered":"https:\/\/www.legitgambling.com\/news\/?p=6805"},"modified":"2018-04-16T07:53:15","modified_gmt":"2018-04-16T07:53:15","slug":"malta-proposes-compulsory-financial-inst-test-for-crypto-companies","status":"publish","type":"post","link":"https:\/\/www.legitgambling.com\/news\/malta-proposes-compulsory-financial-inst-test-for-crypto-companies\/","title":{"rendered":"Malta Proposes Compulsory Financial Inst. Test For Crypto Companies"},"content":{"rendered":"<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-2112 alignleft\" src=\"https:\/\/www.legitgambling.com\/news\/wp-content\/uploads\/2017\/12\/malta.jpg\" alt=\"\" width=\"380\" height=\"250\" \/>The Financial Services Authority of Malta has published a report regarding cryptocurrency regulation process. The <a href=\"https:\/\/www.mfsa.com.mt\/pages\/readfile.aspx?f=\/Files\/Announcements\/Consultation\/2018\/20180413_FITest.pdf\">40-page document defines<\/a> financial instruments under the European law and explains how it applies to cryptocurrencies. Notably, it also reveals that the cryptocurrency related service providers have agreed to undergo a compulsory financial insturment test to determine the legal status of their projects.<\/p>\n<p>The report is a follow up of the previous discussion paper, published by <a href=\"https:\/\/www.mfsa.com.mt\/\">the regulatory authority<\/a> on November 30, 2017. The previous consultation paper had suggested a mandatory test for those who offer virtual currencies, ICO, and related cryptocurrency services. In particular, the <strong>\u201cFinancial Instrument Test\u201d<\/strong> would be the basis of deciding whether a DLT-related company, asset, or service is <strong>\u201cis encompassed under (i) the existing EU legislation and the corresponding national legislation, (ii) the proposed Virtual Financial Assets Act or (iii) is otherwise exempt.\u201d<\/strong><\/p>\n<p>According to the report presented last week, the cryptocurrency related companies have broadly agreed to the proposed mandatory test, but insisted on the need for clarity and legal certainty. The <strong>document has also posed 19 questions for industry participants<\/strong> to review and respond before May 4.<\/p>\n<p>Question 1<br \/>\nDo you agree with the purpose and scope of the Financial Instrument Test?<br \/>\nQuestion 2<br \/>\nDo you agree that the Financial Instrument Test should be a mandatory requirement under the proposed legislative and regulatory framework?<br \/>\nQuestion 3<br \/>\nDo you agree with the MFSA&#8217;s proposed methodology of the Financial Instrument Test?<br \/>\nQuestion 4<br \/>\nDo you agree with the MFSA\u2019s definition for Virtual Tokens?<br \/>\nQuestion 5<br \/>\nDo you agree that Virtual Tokens which can be exchanged for legal tender, bank credit or other DLT assets should fall within the scope of the Virtual Financial Assets Act?<br \/>\nQuestion 6<br \/>\nDo you agree with the proposed checklist for Virtual Tokens?<br \/>\nQuestion 7<br \/>\nDo you agree with the MFSA\u2019s interpretation of transferable securities, as defined under MiFID, within the DLT context?<br \/>\nQuestion 8<br \/>\nDo you agree with the proposed checklist for determining whether a DLT asset qualifies as a transferable security, as defined under MiFID?<br \/>\nQuestion 9<br \/>\nDo you agree with the MFSA&#8217;s interpretation of money market instruments, as defined under MiFID, within the DLT context?<br \/>\nQuestion 10<br \/>\nDo you agree with the proposed checklist for determining whether a DLT asset qualifies as a money market instrument, as defined under MiFID?<br \/>\nQuestion 11<br \/>\nDo you agree with the MFSA\u2019s interpretation of units in a Collective Investment Scheme, as defined under the ISA within the DLT context?<br \/>\nQuestion 12<br \/>\nDo you agree with the proposed checklist for determining whether a DLT asset qualifies as a unit in a Collective Investment Scheme, as defined under the ISA?<br \/>\nQuestion 13<br \/>\nDo you agree with the MFSA\u2019s interpretation of C(IV) to C(X) financial instruments, as defined under MiFID, within the DLT context?<br \/>\nQuestion 14<br \/>\nDo you agree with the proposed checklist for determining whether a DLT asset qualifies as a C(IV) to C(X) financial instrument, as defined under MiFID?<br \/>\nQuestion 15<br \/>\nShould DLT assets be allowed as a means of payment within the context of cash settlement under MiFID?<br \/>\nQuestion 16<br \/>\nShould transfer of ownership of an underlying through the updating of a ledger maintained using DLT be deemed as physical settlement under MiFID?<br \/>\nQuestion 17<br \/>\nFor the purposes of the Financial Instrument Test, what should in your opinion be deemed as appropriate standard delivery periods within the DLT context?<br \/>\nQuestion 18<br \/>\nDo you agree with the MFSA\u2019s interpretation of emissions allowances, as defined under MiFID, within the DLT context?<br \/>\nQuestion 19<br \/>\nDo you agree with the proposed checklist for determining whether a DLT asset qualifies as an emissions allowance, as defined under MiFID? <\/p>\n<p><strong>Malta\u2019s regulator<\/strong> said<\/p>\n<blockquote><p>\u201cIt is envisaged that the test will be applicable both within the context of an Initial Coin Offering as well as during the intermediation of DLT assets by persons undertaking certain activities in relation to such assets in or from within Malta.\u201d<\/p><\/blockquote>\n<p>Malta is not leaving a single stone unturned to project itself as the blockchain technology friendly jurisdiction. However, it wants to make sure that only companies which are willing to work within a legal framework set up shops in the region.<\/p>\n<p><a href=\"https:\/\/www.legitgambling.com\/news\/binance-to-shift-base-to-malta-amidst-warning-letter-from-jfsa\/\">Binance and OKEx are two major cryptocurrency exchanges<\/a>, which have confirmed their willingness to shift their operations to Malta.<\/p>\n<p>Referring to Binance, which is arguably the larges crypto exchange by daily traded volume, <strong>Prime Minister Joseph Muscat<\/strong> said<\/p>\n<blockquote><p>\u201cThey are not saying that they are coming to Malta because they can do what they want. They are saying they are coming because Malta is ready to regulate us, and we are bringing the consumer the peace of mind that there are people regulating this system.\u201d<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"<p>The Financial Services Authority of Malta has published a report regarding cryptocurrency regulation process. The 40-page document defines financial instruments under the European law and explains how it applies to cryptocurrencies. Notably, it also reveals that the cryptocurrency related service providers have agreed to undergo a compulsory financial insturment test to determine the legal status [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[68],"tags":[],"class_list":["post-6805","post","type-post","status-publish","format-standard","hentry","category-cryptocurrency"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.0 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Malta Proposes Compulsory Financial Inst. Test For Crypto Companies<\/title>\n<meta name=\"description\" content=\"The Financial Services Authority of Malta has published a report regarding cryptocurrency regulation process. 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