The first step towards a Virtual Currency Act

The Malta Financial Services Authority (MFSA) has published its response to the feedback received on the Proposed Regulation of Collective Investment Schemes (CISs’) using Virtual Currencies. In its response the MFSA agreed with the suggestion made by key players within the industry that the new regulatory framework should extend to Alternative Investment Funds and Notified Alternative Investment Funds apart from PIFs. It was also extended for PIFs making investments in Virtual Currencies to limited partnerships and unit trusts apart from investment companies with variable share capital and investment companies with fixed share capital.

Noteworthy is the fact that this framework shall be applicable to all CISs investing in Virtual Currencies no matter what the exposure of such investment is.

The MFSA has chosen to reserve its original position however of making the proposed regime available solely to Qualifying Investors. This has been done in view of the specific risks associated with Virtual Currencies and the underlying technologies.

Commenting on this latest development Parliamentary Secretary for Financial Services, Digital Economy and Innovation Silvio Schembri stated that this was the first step towards having a Virtual Currency Act. He further stated that work was being carried out for regulating virtual currencies, ICO’s, exchanges and the use of blockchain technology.