As expected and by virtue of Legal Notice 306 of 2018 and Legal Notice 307 of 2018, the Innovative Technology Arrangements and Services Act and the Virtual Financial Assets Act will both come into force on 1st November 2018, paving the way towards Malta's emergence as the "Blockchain Island". In addition to the Acts, various Consultation Documents have also been published in draft form by the Malta Financial Services Authority ("MFSA") and the Malta Digital Innovation Authority. These set out additional statutory requirements and guidance to persons wishing to operate in this industry, and are expected to likewise be finalised within the coming weeks.
The Virtual Financial Assets Act caters for a very attractive transitional regime, for persons operating prior to the coming into force of the VFAA. VFA Services providers, as defined, may benefit from a 1 year transitory period, commencing on 1st November 2018 – during which period they may operate without a licence, subject to an application for a licence being submitted by the VFA Service Provider to the MFSA within said year. In order to benefit from the transitory period, VFA Service Providers must be operative in Malta prior to 1st November 2018 – the date of coming into force of the VFAA – and must immediately on the coming into force of the VFAA, submit to the MFSA a notice informing the MFSA of the services currently being provided.
In the case of ICOs, issuers may also benefit from a transitory period. The transitional period for ICOs is that of 3 months, provided the offer is made to the public in the 2 weeks prior to the date the law comes into force i.e. between 17th and 31st October 2018 – again in this case, a notification must also be submitted to the MFSA on the coming into force of the VFAA, wherein the issuer informs the MFSA of its activities.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.