Malta Regulation on Crypto

1. Why Malta?

Malta is the first country in the world to introduce a clear regulatory framework around ICOs, tokens and cryptocurrencies. This will ensure that as a founder, you will be able to get certainty on the treatment of your token. Malta, as a jurisdiction, does not regulate Utility tokens. A Utility token does not give token holder any rights, nor obligations. So as long as your token is a Utility token, then you you are free to run an ICO through Malta.

What Utilitonomy can offer here is Regulated Utility Token sale, which can bring your ICO back in the phase of early 2017, when people had trust withthe difference that now trust will be coming out of the regulation.

Launching an ICO in Malta is also regulated in Malta, to be precise, issuing or offering a token or coin to the public is.  This is not really done through a licence, like for exchanges, but through mainly four things:

  1. Registering the white paper according to the VFAA
  2. Complying with the regulation around that white paper.
  3. Having Certified Service provider (Utilitonomy is the first one to be licensed by MDIA) to bring your Token to Primary market
  4. Having VFA agent monitoring (Utilitonomy connects you to all required here)

2. Utilitonomy Based in Malta?

Its not only the we are based in Malta, but in the last year we developed stable connections among the Legal Companies, Service Providers, Government agencies, Auditors, Agents and all parties related to crypto.

We are of course your full solution for taking your ICO on the next level. But YOU and YOUR project are so a huge part of the solution with your compliance and with your continuous efforts to come to terms with this regulation. Your understanding and your empathy for what is required to protect investors, to make and keep ICOs as an viable and sustainable alternative option of crowdfunding.

Here in Utilitonomy we believe that only good projects will survive and we are here to help them benefit of this regulation by combining Sophisticated Software, Legal framework and advising, Bringing exposure to project, Creating the Token and its economics, moving the Token to Secondary market and many more.

3. Malta and my ICO Company - why?

Malta offers various incentives to attract Blockchain companies. These incentives could include:

  1. Capital contributions: They will match the capital you inject.
  2. Assistance with regards to staff salaries.
  3. Office space.
  4. Tax credits

Utilitonomy will be your end-to-end partner in setting up everything that you might need.

As Gaming companies long time ago set up everything in Malta due to the good and profitable financial and taxation models – now Crypto Companies are doing the same, starting with the hugest exchanges like Binance, OKex and many more.

4. Malta and my ICO in meaning of Taxes?

One element that you might overlook when selecting a Jurisdiction over another is the taxation. Taxation plays a big role in your ICO strategic planning.

You need not only consider how the effect of taxation on your raise, but also how profits will be taxed. This is where Malta has a competitive advantage over all onshore jurisdictions.

Malta’s very favourable tax system implies that you will not incur tax  on the money you raise from the ICO. Also Malta’s corporate taxation system could mean that you would end up paying as little as 5% tax.

Another consideration when choosing an ICO jurisdiction is the personal tax. Malta has a very favourable personal tax jurisdiction. New incentives introduced will mean that people in top positions, will pay 15% tax on their income. Malta will not tax any income earned outside of it’s Jurisdiction.

And strictly because a lot of our partner ICOs so far have struggled in finding their way through everything – Utilitonomy builded a full solution which can take you from your idea/product to successfully organising your Token Sale and Distributing your tokens to your investors.

5. Accreditation of Utilitonomy in Malta?

Utilitonomy is to be the first Service Provider of ICO dashboard services licensed by the Malta Digital Innovation Authority (MDIA) as Innovative Technology Arrangements and Services Provider (ITAS or ITS)

We work closely with the MFSA (Financial Regulatory of Malta) and its division for Virtual Financial Assets (VFA) in order to bring any ICO to being compliant and organising regulated VFA token sale to the crowd.

We provide fully configured and complaint Smart Contract, already audited by VFA agent, which is taking your Utility Token only a step away from your Regulated Token Sale. This step is contacting us and we will guide you and provide you with our software in less than 48h.

6. Whats needed to Launch and operate ICO in Malta?

  • Company in Malta (Utilitonomy Guarantees)
  • Board of 2 directors (one of them resident in Malta, both of them “fit and proper”)
  • Board of administration consisting of
    1. VFA Agent (Utilitonomy Arranges)
    2. System Auditor (to audit smart contract of the ICO, and, if any, the underlying DLT – If Handled by Utilitonomy – it will be short process as our Smart Contracts are already audited by MDIA and are compliant)
    3. Auditor (tax and accounting)
    4. MLRO (Money Laundering Reporting Office, can be the local director)
    5. Custodian (Utilitonomy provides as in-platform service or external as integration)
  • Compliance Officer (Utilitonomy Provides or Client arranges – platform supports all options)
  • Policies and Procedures for basically everything
  • Financial Instrument Test (Utilitonomy Guarantees)
  • Cyber Security Compliance (Utilitonomy Guarantees)
  • IT Infrastructure Compliance (Utilitonomy Guarantees)
  • A real product

 

7. What is the MFSA?

The Maltese Financial Services Authority (MFSA) is the sole financial regulatory branch of the Maltese Government, and is responsible for the creation, licensing, management and enforcement of the new regulatory framework surrounding cryptocurrencies.

8. How Do You Obtain A Licence?

Anyone wishing to operate a VFA service within Malta must apply to the MFSA for a VFA licence Under Article 62(1)(c) of the Virtual Financial Assets Act 2018 (VFA), ‘within 12 months from the date of coming into force of this Act’ through a Certified VFA Agent.

9. Who needs A VFA Licence?

There are 4 classes of VFA services which require a VFA licence from the MFSA to legally operate within Malta;

Class 1 (Consulting and VFA Handling):
Licence holders authorised to receive and transmit orders and/ or provide investment advice in relation to one or more virtual financial assets and/ or the placing of virtual financial assets. Class 1 Licence Holders are not authorised to hold or control clients’ money.

Class 2 (VFA Services Without Operating an Exchange or Conducting Own Trades) : Licence holders authorised to provide any VFA service but not to operate a VFA exchange or deal for their own account. Class 2 Licence Holders may hold or control clients’ money in conjunction with the provision of a VFA Service.

Class 3 (Any VFA Services Except Exchange Services):
Licence holders authorised to provide any VFA service but not to operate a VFA exchange. Class 3 Licence Holders may hold or control clients’ money in conjunction with the provision of a VFA Service.

Class 4 (VFA Exchange Service):
Licence holders authorised to provide any VFA service. Class 4 Licence Holders may hold or control clients’ money in conjunction with the provision of a VFA Service.

Worldwide Regulation on Crypto

10. In Which Countries Are ICO’s Considered ‘Securities’?

The United States Securities and Exchange Commission firmly believes that a ‘vast majority’ of tokens sold in ICOs equate to securities under their relevant laws and that issuers require a license to sell them legally within their borders.

In Canada, ICOs have been ruled as securities but will only be subject to regulations on a case-to-case basis.

In Russia, ICOs have come under heavy regulation including being subject to the nation’s securities and taxation laws.

Singapore also treats ICOs as securities under their national laws, and are subject to regulations from the Monetary Authority of Singapore (MAS).

For now the EU is still to agree on whether utility tokens sold in ICO’s should be classed as securities, but still require token issuers to adhere to existing anti-money laundering regulations.

11. In Which Countries Are ICO’s Currently Banned?

China, Morocco, Algeria, Pakistan, Bolivia, Macedonia, Bangladesh, Nepal and Ecuador have all banned ICOs from operating within their country’s borders.

South Korea has also banned ICOs from operating within its territory, however there have been several reports state that official meetings have been held this year to discuss reversing the decision. For now though, the ban remains.

12. What are the Most ICO-friendly Jurisdictions to Issue Utility Tokens In?

Malta, Gibraltar, Estonia, Bermuda, Switzerland, British Virgin Islands, Lithuania, Belarus and the Cayman Islands are currently among the top ‘blockchain-friendly’ countries in the world, and have actively fostered the development of ICOs without imposing strict regulations, sanctions or limitations.

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