Maltese Regulator MFSA Finalizes Cryptocurrency Fund Rules


Maltese Regulator MFSA Finalizes Cryptocurrency Fund Rules following the initial release of the proposed rulebook for regulation of professional investor funds (PIFs) with focus on cryptocurrencies.

24 January, AtoZForex The financial regulator of Malta, Malta’s Financial Services Authority (MFSA) has spoken in regards to the cryptocurrency market. The Maltese financial watchdog has published the remarks it has received regarding the proposed rules for collective investment schemes, which include cryptocurrencies.

Maltese Regulator MFSA Finalizes Cryptocurrency Fund Rules

Back in October 2017, the MFSA has published the proposed rulebook as a part of its attempt to oversee professional investor funds (PIFs) with focus on cryptocurrencies.

That time, the proposal has remarkably changed the structure from a separate rulebook to a complementary document for existing investor rules in place. The latter is structured as per the industry comments, according to the official feedback statement.

The changes appeared as a result of the “ample feedback” that the regulator has received while requesting this change.

Will Malta classify cryptocurrencies as financial instruments?

In fact, the final set of guidelines has not been released yet. However, the Maltese regulator has stated that based on the industry feedback, it has updated the existing rules proposal to enable investments in both cryptocurrencies and tokens that are a part of an initial coin offering (ICO).

The regulatory body further attempted to clarify when these investment funds would be regarded as financial instruments – and when they would not. The official statement from the MFSA reads:

“Furthermore, in its Discussion Paper, the Authority has proposed a Financial Instrument Test to determine under which circumstances a VC would be classified as a financial instrument, in accordance with the general principles of a policy statement issued by the European Securities and Market Authority (‘ESMA’).”

In spite of the feedback to the contrary, the Maltese regulator has decided to enable investors to only invest in cryptocurrency-based funds. This implies that only investors that meet specific minimum requirements would have this opportunity. One of these requirements – a net value of at least 750,000 euros.

The complete set of rules is still in the process of creation and is expected to be released pending further review.

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