Having earned the reputation of “Blockchain Island”, Malta is taking steps to preserve the industry by investing heavily in supervisory technology in order to protect the blockchain industry.
Such investments according to authorities are aimed at ensuring that the inherent risks associated with virtual currencies are kept at a minimal level in Malta.
There Is Work To Do
Having shown a friendly appeal to the blockchain industry and already seeing an influx of activities into the Island, the Malta Financial Services Authority (MFSA) believes that it has its work cut out already. After being heavily criticized over the years for failing to protect victims of the collapsed La Valette Property Funds, the institution appears unwilling to permit any loopholes this time around.
Christopher Buttigieg, head of the Malta Financial Services Authority’s securities and markets supervision unit noted the huge risks involved in environments with large flows of money. Therefore, the establishment is working in advance to block any vulnerability to criminals, money launderers, terrorists, among other bad actors.
The limited number of nations that are open to blockchain and cryptocurrency activities in relation to the expanding nature of the industry implies that these nations will be experiencing a high density influx of activities. Several startups, ICOs and even conferences are moving their activities to nations like Malta.
Apart from the direct monetary risks involved, the need to ascertain the required standards for projects that seek to host their base in such nations will go a long way in defining the society.
Therefore, the extent of MFSA’s activities in achieving a tight system for a sanitized ecosystem cannot be overemphasized.
Malta recently enacted three pieces of legislation covering blockchain and cryptocurrencies. Hence, the efforts of MFSA to tighten the regulatory system ahead of the industry’s expected expansion.
Apart from the La Valette Property Funds scenario, the regulatory institution has also undergone heavy criticism following alleged breaches at Pilatus Bank and other financial institutions. Hence, it is facing increased pressure, along with the Financial Intelligence Analysis Unit, from the European Banking Authority, the European Parliament and the European Central Bank.
These are some of the scenarios that Buttigieg noted that his institution has learned from and would work towards avoiding any chance of reoccurrence. He also explains that MFSA has gone beyond other regulators, and that Malta has already adopted the Fifth Anti-Money Laundering Directive, well before the 2019 deadline.