This week IURIS was present and participated at the exciting Delta Summit spanning from the 3rd till 5th October 2018. The Summit designed to launch and celebrate Malta as the first regulated centre for virtual currency and ICOs showcased Malta’s achievement as a global leader in blockchain technology regulation – leading it to be the ‘Blockchain Island’.
The 4th Industrial Revolution – From bartering to coins, to fiat currency to tokens.
The technological transformation that has been taking place in the last decade will fundamentally change the way we live, work and interact whether we like it or not, so we may as well be part of it and history in the making. This digital revolution is disrupting every industry on a global level with a direct effect on governments, business and people everywhere. The Delta Summit discussed most of these emerging innovative technologies like Artificial Intelligence (AI), Robotics and the Internet of Things (IoT).
The digital changes happening at such rapid speed and with such an impact is proving to be a serious challenge for regulators to be nimble and proactive in their responses. Malta’s ambitious stance in pushing for a flexible regulatory framework for innovative technologies has been hailed as an impressive blueprint for other jurisdictions.
The Regulatory Framework
On the 4th of July, the Government published 3 pieces of legislation that set out a basic regulatory framework for Distributed Ledger Technology (DLT). This framework is designed in way to allow the technology to grow and develop into a strong ecosystem that will revolutionise the way we live over the next decade. The 3 pieces of legislation are: the Malta Digital Innovation Authority Act; the Innovative Technology Arrangements and Services Act; and, the Virtual Financial Services Act.
The Malta Digital Innovation Authority Act set up the Malta Digital Innovation Authority (MDIA) who will be responsible for the certification of Innovative Technology Arrangements and the registration of Systems Auditors and Technical Administrators. The MDIA’s role is to strike a balance between regulation and innovation as well as protecting consumers, investors and Malta’s reputation by implementing the best standards in the sector. The Innovative Technology Arrangements and Services Act (‘ITAS Act’) focuses on the registration of Technology and certification of Technology Arrangements as required by the MDIA to operate.
The Malta Financial Services Authority (MFSA) responsible for Fintech regulation in Malta formulated ‘The Virtual Financial Services Act’ (‘VFAA’), which regulates Initial Virtual Financial Offerings (aka ‘Initial Coin Offerings’ or ‘ICOs’), Virtual Financial Assets (‘VFA’) and anything ancillary thereto. This Act sets out comprehensive requirements for those launching cryptocurrencies and other related service providers including cryptocurrency (DLT) exchanges, custodians, eWallet providers, portfolio managers, etc. Any launch of an initial VFA offerings (ICOs) and admission to trading on a DLT exchange will require the registration of a ‘White Paper’ with the MFSA as the competent authority. Any entity that wishes to offer VFA or wishes to be a VFA service provider will need to apply for a licence from the MFSA through the assistance and guidance of a registered VFA Agent.
These 3 Acts aim at providing market stability, market integrity and consumer protection to this regulated sector whilst giving legal certainty and innovative flexibility to the operators.
The Summit spanned over 2 days with non-stop discussions and talks from all walks of life, from innovators to technology enthusiasts, from academics to entrepreneurs from aspirants to the first operators in this industry. Apart from discussing the regulatory framework and the services required to build a strong blockchain ecosystem in Malta, discussions focused on the impact of such technologies on healthcare, cities and the creative arts and the impact they will endure. Apart from thought-provoking speeches, the Summit gave the opportunity to leading players in the sector to showcase their innovative technologies and services for the digital world. The Innovation stage put a spotlight on inspiring stories in the crypto finance world, on the startup ecosystem and DLT innovation.
At the Summit, the MDIA was officially launched and the presence of the other regulators (MFSA, MITA, MGA & MCA) showed the unified approach which Blockchain Malta is tackling this new field thereby giving the opportunity to all attendees to connect with the regulators and put forth any queries.
The Malta Gaming Authority (MGA) also took this opportunity to publish details on its Sandbox Framework for the acceptance of VFAs and Virtual Tokens and the use of Innovative Technology Arrangements within the gaming industry.
Stating that the Summit was a success is simply an understatement considering that it attracted over 4000 participants from around the world and infused everyone with an enthusiastic energy to explore and tap into the incredible opportunities presented by these disruptive revolutionary technologies. Blockchain will change our lives, will change the future will change the manner in which we immutably store our information and eventually history – It will disrupt the present commercial structure for an innovative, decentralised and participatory new commercial structure – Be part of it!
IURIS is on the forefront of these developments and will keep abreast with more developments to be of service in this new ecosystem for all its clients.