It appears that the crypto waters are getting slightly muddy in the ‘Blockchain Island’ of Malta of late.
Although just a few days ago, it was announced that a new crypto bank – which claimed to be the world’s first decentralized bank – would begin operations soon, it appears that the Malta Financial Services Authority which is spearheading the implementation of newly approved crypto and blockchain legislation, was ‘unaware’ of adverts going around regarding Founders Bank.
Founders’ Bank which is backed by crypto exchange Binance has been awaiting a banking license since June 12, according to the government. The blank has said that it also planned to launch in the first half of 2019. Companies without a banking license can only market themselves as a bank after obtaining written permission from the Malta Financial Services Authority, according to the Banking Act.
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A spokesman for the regulator said: “What we are aware of media articles mentioning Founders’ Bank’s plans to set up a blockchain-based bank servicing technology and cryptocurrency businesses. Any applications for this type of bank will have to follow all the MFSA’s on-boarding procedure.”
When pressed, the spokesman said that it the MFSA had nothing to add when it was informed that Founders’ Bank was clearly advertising itself as a bank on its website and also in a blog post.
The Banking Act says that:
12(1) Subject to sub-articles (2) and (3), save with the written permission of the competent authority, no person other than a credit institution with a current licence may use the word “bank” or any of its derivatives or other words as may indicate or purport to indicate the carrying on of the business of banking in any language in the description or title under which such person is carrying on business, or make any such use on any letter paper, in any notice or advertisement, or in any other similar manner”.
Sources who spoke to CCN said that it was impossible for Malta to amend its Banking Act to accommodate demands from companies such as Founders Bank since this was EU legislation which can only be changed through the approval of all 27 member states.
Founders Bank said that users could directly access their accounts and use them with credit cards from both the mobile and desktop web applications, when using cards issued by Founders Bank. It also said that it would focus on serving tech and crypto business and would also offer top-tier banking solutions. This was stated in a blog post and when pressed, they refused to comment further.
Featured image from Shutterstock.