Category: DLT Regulation

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Jurisdictions with a different legal outlook towards Coin Offerings

Categories Blockchain, Cryptocurrency, ICOs, Malta, Law, DLT Regulation, Regulation

Jurisdictions with a different legal outlook towards Coin Offerings

The year 2018 was marked with technology advancements and new trends. The DLT industry started to get widely recognised in many jurisdictions around the world, making way to a new digital economy. Most financial service providers are using technology to their advantage, utilising blockchain wisely to store in data, or creating complex mathematical algorithms to create an easy way to digitally facilitate, verify, or enforce agreements by means of smart contracts. Moreover, the FinTech industry is also growing substantially, with many financial institutions opting to become part of this industry.

Countries implementing different ICO Laws

This year has marked a record-high for new ICO ventures launching their crowdfunding platforms. Many companies are now opting to design tokens to be exchanged for services offered to their clients. Various countries have taken different regulatory approaches towards this growing industry, with some regulating the space and others opting for non-regulation. Certain countries decided to implement strict legislation by banning people from owning cryptocurrencies or investing in ICOs altogether, while others have built well-structured progressive legal frameworks that provide legal certainty.

Stringent laws taken by the SEC in the US towards ICOs

Meanwhile in the US, ICOs are not formally regulated across the country, however, various administrative agencies, such as the Commodities Futures Trading Commission (CFTC), the Financial Crimes Task Force (FinCen), the Department of Justice (DOJ) and the Securities Exchange Commission (SEC) have taken measures to regulate this market. The most notable administrative agency overseeing ICOs is the SEC. The SEC’s purpose is to investigate and regulate all securities issued by companies, while “protecting investors, maintaining fair, orderly and efficient markets, and facilitating capital formation.

Although no concrete legislation regarding ICOs is in place, the SEC has jurisdiction over any securities related matter from the power granted to it by the Securities Act of 1933 and 1934. Guidance is also given regarding to what constitutes a security by the 1946 Supreme Court Case commonly known as Howey. Howey set forth a test used to determine whether an asset being offered constitutes the sale of a security. This test is applicable to all ICO issuances implicating the United States. The Howey Test is a financial instrument test which states that, if the asset meets all the elements, then it will be treated as a security. The elements of the test are as follows: 1) an investment in a common enterprise, 2) with the expectation of profits, 3) primarily derived from the entrepreneurial efforts of others.

Companies in the US launching their ICO have been commonly identifying their tokens as utility tokens in hope of circumventing registration with the SEC. However, utility tokens are not a legally recognised concept in the US and instead, the SEC looks at the economic realities of the transaction.

Although the US has stringent ICO Laws, companies are still risking to set up and open their ICO venture, due to the United States entities receiving the highest amount of crowdfunding.

In the past year, a number of celebrities and other public figures have endorsed ICOs, encouraging their fans to invest their money. However, recently, the SEC issued a warning to investors in various tokens stating that they are subject to have violated anti-touting laws along with anti-fraud provisions. In this case however, the SEC failed to clarify how these endorsements were paid, either directly or by indirect payment. Moreover, the SEC stated that celebrities marketing such ICOs “…may be unlawful if they do not disclose the nature, source, and amount of any compensation paid, directly or indirectly, by the company in exchange for the endorsement. The SEC’s Enforcement Division and Office of Compliance Inspections and Examinations encourage investors to be wary of investment opportunities that sound too good to be true.  We encourage investors to research potential investments rather than rely on paid endorsements from artists, sports figures, or other icons.”  Hence, these promoters might be held liable on the basis of ‘acting as unregistered brokers’ as well as taking part in transactions of securities which have not yet registered by the SEC.

What about the Asian market?

Asian countries have taken various stances with regards to ICOs; some have imposed strict laws banning ICOs altogether, while others take a lenient and progressive approach towards ICO tokens and treat them on a case by case basis. For example, the Monitory Authority of Singapore (MAS) does not regulate the issuance of utility or payment tokens, but only security tokens. With this positive approach many ICOs – who typically issue utility tokens -have launched their ICO in Singapore, making it one of the most popular jurisdictions in Asia.

On the other hand, the People’s Republic of China (PRC) took a firm stance against all ICOs, banning citizens from launching them altogether. In addition, any coin offering including exchanges used to trade virtual coins have also been banned. This approach was set in motion when China stated that all ICOs are bound to hurt the market since they are prone to deception and fraud. For this reason, the PRC is encouraging ICOs issuing their currency to follow laws which protect investors rights while trading on a platform.

European Diversity

In Europe, many countries have enacted favourable ICO Laws, attracting Asian companies to shift their operations to Europe, which in turn resulted in a healthy growth for the sector. Three proactive and progressive jurisdictions in Europe that have received praise from many fronts are Estonia, Switzerland and Malta. Many large crypto-exchanges set up shop on the territory of these three countries, especially in Malta.

Estonia with its already set and business-friendly laws is attracting many ICOs and crypto companies to register their operations on its territory.

In the “crypto-valley” of Switzerland and the technological city of Zug, there are many ICOs operating. The Swiss Financial Market Supervisory Authority (FINMA), has implemented forward-looking ICO Laws, and many investors and issuers see Switzerland as a “go to” country due to its favourable taxation laws.

Meanwhile the Maltese Parliament has provided a firm progressive stance with regards to Blockchain, ICOs and crypto exchanges. This has motivated many big companies such as OKEx and Binance to move their operations to the island. On the 1st of November, three regulating acts came into force, which will enable more businesses working in this industry to benefit from these innovative laws. The Malta Financial Services Authority (MFSA), will be the primary institution regulating this sector. Moreover, Malta’s tax rate to foreign companies is that of 35%, but by implementing effective tax planning it can go down to as low as 5%.

Malta is gaining a lot of traction within the tech industry, with many companies opting to set up shop on the Island. Malta will continue to strive and compete with other countries who are looking to follow the “Blockchain island” regulating framework of this industry.

Many legal companies sought out the opportunity to delve into this industry. One of the companies to stand out in the industry is surely E&S Group, a legal and corporate firm based in Malta, offering tailor made services to ICOs, crypto exchanges and Tokenomics to clients. So far E&S Group has successfully advised over 90 ICOs. E&S Group is being sought after by several ICOs wishing to launch their ICO project in Malta. Apart from that, said ICOs would also need to incorporate their company in Malta before getting started with their crowdfunding their project.

If you would like to know more about what we offer, send us an email on [email protected]. Our professional team of lawyers and accountants are there to make sure that your ICO will happen.

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Maltese Prime Minister Welcomes Switzerland as a Competing Blockchain Hub

Categories Blockchain, Cryptocurrency, Malta, European Commission, The Blockchain Island, DLT Regulation, Blockchain Leadership Summit

Maltese Prime Minister Welcomes Switzerland as a Competing Blockchain Hub

“Regulation gives certainty to investors, give certainty to consumers and it provides the level playing field that the industry needs”, – words spoken by the Prime Minister of Malta Joseph Muscat during his interview with CNN Money during the Blockchain Leadership Summit in Switzerland, in which E&S Group team members participated at.

The Maltese Prime Minister welcomes Switzerland as a competing crypto hub and encourages other jurisdiction to step into the industry in order to create a EU Blockchain framework. Among the roadblocks for mass blockchain adoption he mentions the misunderstanding of the blockchain concept, initial scalability, environmental problems along with other topics such as; e-learning, AML European rules, KYC procedure and the virtual euro as a currency of the future.

“We are moving slowly but steady”, – the Prime Minister comments’ when questioned about the legislation development in Malta.

Watch the full interview via link – https://www.cnnmoney.ch/shows/blockchain/videos/malta-pm-joseph-muscat-european-union-blockchain-framework 

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Crypto-friendly banks expected to open in Malta in the next 12 months

Categories Blockchain, Cryptocurrency, ICOs, Bank, DLT Regulation, E&S Group, Cryptocurrency Exchange, Tokens, Wallet, Delta Summit

Crypto-friendly banks expected to open in Malta in the next 12 months

Roderick Psaila, a Malta-based banking expert spoke about the future of crypto-banking at the Delta summit in Malta held between the 3rd and 5th of October. The three-day event was the world’s first official and government approved blockchain event of its type, and it attracted over 1500 delegates from all over the world.

Speaking as a part of a discussion panel, he was responding to criticism of traditional banks hesitancy to embrace blockchain, DLT, and cryptocurrencies despite the fact that the Maltese government has approved the DLT legislation in November.

“We are already seeing new, smaller banks show a willingness to adopt blockchain technology, but legacy banks will take longer to come round, because of their systems in place and because they tend to expect higher standards,” he said.

He also stated that he believes that two to three crypto friendly banks will open in Malta within the next year that will be amenable to blockchain and crypto, as well as being conducive to the industry’s growth.

This could be due to the fact that it is unlikely for the banking industry to fully adopt and embrace blockchain technology until matters around its compliance with anti-money laundering framework were finalised. Until this framework has been deemed acceptable to banks, it doesn’t matter how acceptable it is to operators, ultimately the banks have the final say.

Also on the panel was Michael Matthias who is the CEO of digital currency Dascoin and he stated the need for banks to catch up with modern technology instead of shying away from it.

“And yet, as blockchain technology becomes more mainstream, it is not farfetched to imagine a near future in which cryptocurrency is used as the coin of choice in everyday payments and transactions,” he said.

The Delta Summit, the first of its kind has been called a resounding success by all that attended. Dr Christian Ellul, Director of E&S Group also spoke on a panel discussing Malta’s bright future as the “blockchain island”. Other speakers at the event included the Prime Minister of Malta Joseph Muscat, Changpeng Zhao the CEO and Founder of Binance, and other global stakeholders in the blockchain, crypto, DLT, and ICO sectors. If you have any questions in relation to ICOs, and Malta’s legislation regarding ICOs and blockchain please contact us on [email protected]

 

 

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An intro to Malta’s Innovative Technologies Regulatory Framework

Categories Blockchain, Cryptocurrency, ICOs, Malta, The Blockchain Island, DLT Regulation, VFA Act, DLT

An intro to Malta’s Innovative Technologies Regulatory Framework

November welcomed two new acts which came into force in Malta seeking to regulate the DLT, cryptocurrency and ICO markets. The country has positioned itself as a leading innovator in the regulatory treatment of such industries, with blockchain technology at the forefront of its agenda.

Over the last year, a collaborative and consolidated effort has been underway to develop and then enact the new legal framework that comprises of the Virtual Financial Assets Act, the Malta Digital Innovation Authority Act, and the Innovating Technology Arrangements and Services Act. The first of its kind, not just in Malta but globally, it will hopefully not only cement Malta’s position as a jurisdiction of choice for those looking to operate in these spheres, basing their own legal frameworks on these three acts.

A step forward

This is an important step forward in the global industry and is sure to bring technologists and innovators to the country in order for them to escape from the regulatory grey-area that exists in the crypto ecosystem. Based on sound legal and regulatory principles, the acts are set to promote legal certainty, drive consumer adoption, and instil confidence in the market.

In order for the industry to truly succeed, legal certainty needs to be attained in respect of what the applicable fundamental legal tenets of governance, ownership, and liability are – something that is being hotly debated in other jurisdictions.

Comprehensive legislation

The DLT and blockchain framework takes steps to combine business, legal, and technological aspects together through a range of regulatory tools including VFA Agents, System Auditors and Subject Matter Experts. There are also measures in place that relate to whitepapers, smart contracts, cybersecurity, and blueprints.

With the march of innovation and technology seeming totally unstoppable, Malta’s willingness to embrace and regulate them has put the country in pole-position on the global stage. By enacting these flexible but stringent rules, the sector will grow and develop whilst retaining its integrity. Furthermore, Malta’s reputation as a jurisdiction of choice for blockchain and crypto-related businesses will go from strength to strength.

E&S Group is a leading corporate & law firm offering various services with regards to ICOs. Feel free to contact us directly on +356 20103020 or by email at [email protected] to find out how E&S can help you in ‘making things happen’.

For more information click the link.

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It’s official, Malta has welcomed the VFAA and ITAS today!

Categories Blockchain, Malta, The Blockchain Island, DLT Regulation, E&S Group, Technology, Regulation, VFA Act, DLT

It’s official, Malta has welcomed the VFAA and ITAS today!

The long wait is over, Malta has set to become a world leader and a pioneer in regulating the world of Distributed Ledger Technology (DLT), Initial Coin Offering (ICOs), crypto exchanges, Artificial Intelligence (AI) and FinTech. Its progressive laws have already made waves around the world with many companies transferring their offices to the island.

This phenomenon has started to provide many opportunities within the industry, so that many Maltese companies have also started to delve into this sector, creating blockchain platforms to sell to companies, launching ICOs and investing in cryptocurrencies. Through this technological ecosystem, many industries got involved in this new sector of digital economy.

Today 1st November, the Maltese government has successfully enacted the two remaining bills to secure the DLT journey on the island. These laws are the Virtual Financial Assets Act, and the Innovation Technology Arrangements and Services Act respectively. While on the 5th of October during the Delta Summit, the Hon. Silvio Schembri launched the Malta Digital Innovation Authority Act.

This rollercoaster ride started in March 2018, when the Junior Minister for Financial Services, Digital Economy and Innovation declared that the Maltese government was looking into ways to regulate the DLT space. A public consultation was organised inviting and appointing prominent key stakeholders in the industry, aiding the government to draft the three laws for further clarifications. E&S Group along with other legal companies participated in this consultation pushing toward a friendly, clear and well-regulated digital industry.

On the 24th of April 2018, Hon. Silvio Schembri presented the 1st reading of the 3 bills in parliament for further amendments. The outcome was successful, as both sides of the house approved and supported this new legislation.

The Virtual Financial Assets Act was published on the 22nd of May 2018. This Act brought further clarifications as to where Malta is set to move with its regulations of ICOs, crypto exchanges and how the appointed authority has to act in order to help regulate this sphere.

During the launching of the Delta Summit on May 22nd, the Maltese Parliament published the three final DLT laws online, indicating what is expected to be regulated. This brought about a lot of noise around the world. Many crypto exchange companies started to move their offices to Malta. Moreover, the Maltese public transport took a stance to partner with Omnitude, a blockchain company to start a partnership agreement to develop a blockchain-based middleware technology for the Malta Public Transport Service.

The Maltese government unanimously passed the third reading of the 3 DLT regulations on the 4th of July. On that same day, the MFSA published their consultation paper to regulate the Virtual Financial Assets Act (VFAA). These laws caused interest from many legal firms wanting to know more on how to help their clients pass their regulating test and become licensed to operate in Malta. The MFSA created the Virtual Financial Agent as presented in the VFA law. All licensed agents are required to assist ICOs and crypto exchanges to become licensed by the authority.

Through this wave of clear DLT legislation technology, Maltese companies such as E&S Group have found a perfect opportunity to do something different. In March 2018, E&S Group became the first legal and corporate firm to tokenise its services. This gave clients the opportunity to pay for legal and corporate services with ESTS tokens, created by E&S Group.

Malta has taken a big leap of faith in the industry becoming the first to provide friendly yet well-structured laws to regulate the technology. This will provide a better opportunity for enterprises to trust in the “Blockchain Island”, thus becoming a hub for ICOs, Blockchain, Fintech and other innovative economy sectors.

If you would like to know more about the benefits Maltese legislation offers in the sector of digital economy, please contact us on [email protected]. Our professional and dedicated team will help you better understand the Blockchain industry in Malta. E&S Group will ‘make things happen.’

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Prime Minister of Malta tells UN that crypto is the future

Categories Blockchain, Cryptocurrency, Malta, DLT Regulation, E&S Group, Technology, DLT, UN

Prime Minister of Malta tells UN that crypto is the future

Malta’s Prime Minister, Joseph Muscat has told the United Nation that he believes cryptocurrency is the “inevitable future of money”. Muscat made the remarks as he addressed the general debate of the 73rd Session of the General Assembly of the United Nations on September 27th.  And in 2 days he is taking part in the biggest crypto-related event of the year, Malta Blockchain Summit to support the “Blockchain Island” initiative.

Transformative technology

The Prime Minister made an enthusiastic case for crypto, citing it as a transformative combination of cutting-edge technology with immense political impact and talking about the possibility of creating a new “digital state”.

“Blockchain makes cryptocurrencies the inevitable future of money, more transparent since it helps filter good businesses from bad businesses. But these distributed ledger technologies can do much more,” he added.

He then argued that distributed ledger technologies (DLT) have the potential to transform civil, political, and corporate systems. Mr Muscat explained that the possibility to solve decades old problems was a big reason for pushing Malta to be “the Blockchain Island”. Malta has recently become the first jurisdiction in the world to regulate the technology, paving the way for regulatory certainty and clarity, as well as removing the industry from a “legal vacuum”.

The future

He also talked of creating a place where no one is deprived of their legitimate property because of compromised data, that corporations become more accountable to their shareholders, and that states move from hoarding information on their citizens to regulating an environment where citizens trust the handling of their own data. In the healthcare sector, Muscat spoke of a system where patients could have real ownership of their medical records, where the administration would be more efficient and therefore save significant sums that would be better spent elsewhere within the system.

But, despite the Prime Ministers praises, he spoke of hurdles that the industry faces, noting that:

“There are challenges in this fast and obvious transition to a digital economy and society. These challenges have to do with the very nature of concepts that we believed would stay with us forever […] but solutions do not come by closing doors.”

In June the Maltese parliament passed three DLT and crypto bills that are due to come into force tomorrow on November 1st 2018, after being put back from the original enforcement date of October 1st.

E&S Group is a leading corporate & law firm offering various services with regards to ICOs. Feel free to contact us directly on +356 20103020 or by email at [email protected] to find out how E&S can help you in ‘making things happen’.

For more information click the link.

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A Half Year Report on virtual currencies in 2018

Categories Blockchain, Cryptocurrency, Regulatory, ICOs, Malta, ICO Legal Service, Law, The Blockchain Island, DLT Regulation, Smart Contracts, E&S Group, Technology, Trading, Cryptocurrency Exchange, Tokenomics, Regulation, Tokens, Binance, Utility Tokens, Security Tokens, DLT

A Half Year Report on virtual currencies in 2018

2018 has been an interesting year for crypto with colossal crashes, much-needed market adjustments, and of course, the emergence of a large number of new tokens and cryptocurrencies. Along with significant advances in regulation and legal frameworks that seek to understand, support, and protect those stakeholders operating within this new industry, there is no doubt that the rest of 2018 is going to be just as, if not more exciting as the previous six months.

Mid-January Market Crash

If you were holding Bitcoin in December 2017, you probably couldn’t believe your luck. As the value of a single Bitcoin headed towards $20k, a mad rush to invest ensued and predictions on where the price may head reached stratospheric new heights. Then on January 16th 2018, Bitcoin investors woke up to a nasty shock. The value of their coins had dropped by 15% and this news had a knock-on effect on the value of all other altcoins, causing a huge slump in the value of the market. The excitement and hype that had surrounded cryptocurrencies just a few days before, disappeared just like the profits of those who invested in it.

As prices continued to fall, investors started to panic. They started selling their coins in an effort to nip their losses in the bud and the moniker “Black Tuesday” was coined. Some crypto-coins saw losses of up to 40% and it seemed like many naysayers predictions were coming true and that the bubble had finally burst. Some voices remained steadfastly optimistic however and maintained that price slumps were common in all markets, not just the crypto one. After such an exponential increase in value, it was naturally expected that the market would correct itself because after every meteoric rise comes to a reverse-swing of the pendulum that needs to be ridden out – January was exactly that. As prices are now more stable it is hoped that they will increase at a steady rate, signalling a new era of market stability and maturity.

TRON Makes a Name for Itself

Since January of this year, TRON has experienced a steady increase in value. Despite a few issues, mainly caused by the crypto price-crash, it seemed to have found its niche which suggests a bright future for both the platform and its cryptocurrency.

TRON is a decentralised, blockchain-based, protocol project that functions as a content distribution platform for the digital entertainment industry. Whilst the platform itself is yet to go live the TRX coin is gaining significant traction.

Created by Justin Sun in 2017, the concept behind it is to establish a global network of free entertainment content which allows creators to publish, store and distribute their own content without the need for an intermediary. Whilst its value per coin was only $0.30 in January, it is expected to hit $1 by the end of 2018.

Its main selling point is that it is not just another cryptocurrency. It has a platform that solves a problem and offers functionality to a range of users and publishers. Over the last year, TRON has increased in value by 1.39% making it one of the top crypto coins in terms of growth, making it one to keep your eye on as we progress through 2018.

The Unexpected Rise of Litecoin

Many have dismissed Litecoin as “the poor man’s Bitcoin” but despite this, its popularity has increased drastically over the past few months. It was initially launched via an open-source client on GitHub in 2011, a sort of spin-off of the original Bitcoin Core client, but it offered much lower block generation times, a higher number of coins, a modified GUI, and a different hashing algorithm.

In 2013 it experienced a big surge in value and by May 2017 it had secured a spot as one of the Top 5 global cryptocurrencies in terms of its market cap. Now accepted by a wide range of online retailers, its adoption is increasing and many are seeing it as a better alternative to the rather bloated and over-inflated Bitcoin.

12 and even 6 months ago, blockchain was not something that was widely understood but as we progress to the end of 2018, it is expected that we will see a dramatic uptake of blockchain integration across a diverse range of sectors. Following in the footsteps of IBM, Microsoft, and Maersk, even smaller SMEs are likely to be interested in harnessing its potential.

Litecoin is predicted to peak at a value of over $600 per coin by the end of 2018 and there is no doubt that it has huge potential. Negating many of the issues that are faced by Bitcoin users, it presents a practical, simplified and completely viable alternative to the crypto-giant.

Malta Takes the Lead in Industry Regulation

In the last 12 months, it has seen cryptocurrency, blockchain and ICOs negate a minefield of regulatory and legal issues. Problems around its classification, AML and KYC regulations, and the reluctance of many banking institutions to support the burgeoning technology has resulted in many setbacks for the crypto world but that is all set to change.

The island of Malta has long been a hub for digital technologies and it is well known for its iGaming, Finserv and Fintech industries that when combined, account for around half of the country`s GDP. Then, in March 2018 the Government announced the drafting of three new bills that would seek to provide legal and regulatory clarification on DLT, crypto, and ICOs. These bills are the Virtual Financial Assets Bill which would provide a regulatory framework for ICOs and virtual currencies, the Malta Digital Innovation Authority Bill and the Technology Arrangements and Services Bill which will oversee companies that operate within the market, as well as providing a much-needed guidance and clarification.

This makes Malta the first jurisdiction in the EU, and the world to create a comprehensive legal framework that not only protects all stakeholders including operators and investors, but also supports the growth and development of the industry. By ensuring explicit legal clarification as well as adherence to AML and KYC regulations. This means that the industry will receive a much-needed confidence boost and will help to increase the  level of public trust in this new market sector.

Binance Relocates to Malta

As a result of Malta’s decision to support cryptocurrencies and related industries, an exciting announcement came just a few days later. Binance is the largest cryptocurrency exchange in the world and commands 10% of the global trading volume as well as having a market capitalistion of $1.3billion at the time of writing. Its founder Changpeng Zhao started Binance in July 2017 and in just a couple of short months, it has grown to be the market leader.

Following the introduction of restrictive laws in Japan and China regarding cryptocurrencies and exchanges, Binance was on the look out for a more welcoming and flexible home. On March 23rd, Binance announced their move to Malta and the crypto community rejoiced. Such a vote of confidence is a big deal for the small EU country and it is expected that such a move will encourage many other companies and startups to follow suit.

The Blockchain Boom

This time last year, most people had heard of the blockchain but only in the context of it being intrinsically linked to Bitcoin. Now, the technology has broken away from just monetary uses and has earned a lot of attention for its potential. In the last few months, more and more use cases have come to prominence at blockchain has found uses in industries such as logistics, healthcare, politics, real estate, and even crypto-powered beer vending machines. It has also been tipped to completely revolutionize the way we vote, as well as provide microloans to SMEs in developing countries and to solve the energy crisis in third world countries.

 

E&S Group is a leading corporate & law firm offering various services with regards to ICOs. Feel free to contact us directly on +356 20103020 or by email at [email protected] to find out how E&S can help you in ‘making things happen’.

For more information click the link.

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Blockchain island to welcome Waves

Categories Blockchain, Cryptocurrency, Malta, The Blockchain Island, DLT Regulation, E&S Group, Regulation, Waves

Blockchain Island to Welcome Waves

Waves, a popular decentralized blockchain application, is currently in talks to relocate all or some of its operations to the island of Malta.

This week CEO of Waves, Sasha Ivanov met with the Maltese Prime Minister, Joseph Muscat to discuss the accreditation required to operate within the country. Cooperation in terms of land registry, voting, healthcare and other sectors, as well as various proposals to use Waves as a platform for the tokenisation of financial instruments, was also discussed.

In a statement released by Waves, the meeting was described as “encouraging”. The statement added:

“We are interested in this accreditation and are ready to start working with Malta’s legal experts to bring our ready-to-use blockchain solutions here.”

Junior Finance Minister, Silvio Schembri added that there was a chance that the Maltese government would reach an agreement with the Russian company in the coming weeks. Good for Waves, the Russian state-owned manufacturing conglomerate Rostec has agreed to work with Waves on the development and implementation of the Waves platform for the management of data with $2 million being invested into the project.

This week, Waves also announced the launch of a new protocol that would allow smart contracts to run over the Waves main-net.

Over the last few months, Malta has seen an incredible influx of big-name cryptocurrency related businesses relocation to Malta. Binance, OKEx, BitBay, and ZB.com have all announced either a full relocation or the opening of operations in the country, now dubbed “blockchain island”.

This current influx of blockchain and crypto related businesses is due to the three acts that are to come into force on the 1st of November 2018 that will seek to regulate and define the burgeoning industry. These new laws will place Malta at the forefront of global regulation for cryptocurrency and related industries, making it something of a pioneer.

If you own or think of starting a blockchain-based business, then Malta should be at the top of your list when it comes to choosing a jurisdiction. To find out more about setting up a business in Malta, and all of the legal and regulatory requirements, please contact a member of our team here. E&S Group is perfectly positioned to help with setting up companies and business structures, providing fiscal and legal advice. Contact us on [email protected]

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Forbes quotes Muscat’s Bitcoin Prediction

Categories Blockchain, Cryptocurrency, Malta, The Blockchain Island, DLT Regulation, E&S Group, Bitcoin, Tokenomics, Regulation

Forbes quotes Muscat’s Bitcoin Prediction

The Prime Minister of Malta Joseph Muscat has recently gained the fame as one of the most often quoted politicians in the European space due to his statements on the development of the digital industry and its regulation.   He has already announced his positive attitude towards bitcoin and blockchain from the point of their ability to eliminate third party service providers, giving users more freedom over information and money.

Forbes writes about the “Massive Bitcoin Prediction” according to the statement of Malta Prime Minister Joseph Muscat in an address to the United Nations General Assembly, where he has expressed his belief that blockchain technology is the tool that will help digital currencies “inevitably” gain mass adoption and become the future of money.

“I passionately believe technology revolutionizes and improves systems,” said Muscat. “This is why in Malta, we have launched ourselves as the blockchain island.”

“By being the first jurisdiction worldwide to regulate this new technology that previously existed in a legal vacuum. Blockchain makes cryptocurrencies inevitable future of money. More transparent, it helps filter good business from bad business.”

“Emissions trading systems can be taken to the next level. We can help verify that humanitarian assistance is reaching its intended destination. We can make sure that nobody is deprived of their legitimate property because of compromised data.”

E&S has already written about the progressive attitude of the Maltese authorities towards blockchain and the interpreters operating within this space, coming up with the regulation on the 1st of November.

Operating in Malta, E&S Group adheres to the Maltese laws with regards to ICOs, cryptocurrency exchanges and tokenomics. If you require further information contact us by sending an email on [email protected]. We make things happen!

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1st of November – Maltese Regulation Comes into Force

Categories Blockchain, Cryptocurrency, ICOs, Malta, Law, The Blockchain Island, DLT Regulation, E&S Group, MFSA, VFA Act, DLT

1st of November – Maltese Regulation Comes into Force

Since March, the Maltese government has begun discussing the ways to regulate the Distributed Ledger Technology (DLT) and the related digital space, including Initial Coin Offerings (ICO), cryptocurrency exchanges, Blockchain based companies, FinTech and Artificial Intelligence (AI). Through this progressive approach taken by the authorities, many big corporations namely, Binance, OKEx and Neufund have chosen Malta to be the place for business relocation. These companies have also helped the Maltese government to draft such progressive laws, encouraging more businesses to transfer their operations to the island. Prime Minister Dr Joseph Muscat tweeted that “[Malta’s] aim [is] to be[come] the global trailblazers in the regulation of blockchain-based businesses and the jurisdiction of quality and choice for world-class fintech companies”.

On the 4th of July 2018, the Maltese parliament unanimously passed three laws, namely: Malta Digital Innovations Authority (MDIA), Virtual Financial Assets Act (VFAA) and the Innovation Technology Arrangement and Services Act (ITAS). This was a success, making Malta a leader in this ever-growing industry, hence dubbed as “The Blockchain Island”.

The industries had been waiting for these laws to be implemented for a long time. Regarding the Innovative Technology Arrangements and Services Act, 2018 (ACT No. XXXIII of 2018) the Minister for the Digital Economy has established the 1st November 2018 as the date on which the provisions of the said Act shall come into force. In exercise of the powers conferred by article 1(2) of the Virtual Financial Assets Act (ACT No. XXXIII of 2018), 2018, the Parliamentary Secretary for Financial Services, Digital Economy and Innovation, in consultation with  Malta  Financial  Services  Authority,  has  established  the  1st November 2018 as the date on which the Act shall come into force.

The MDIA, which falls under the Malta Financial Services Authority (MFSA), has already been in operation.

What do the VFA Act and the ITAS Acts change?

One of the most important acts is the VFAA, as it regulates the whole Initial Virtual Financial Assets Offering and Virtual Financial Assets ecosystem and increases transparency requirements. The high-level principles and means of prosecution are applied to those who abuse market regulations, for example, by not adhering to the 5th anti-money laundering directive.

The VFAA covers the following; offering of VFAs, regulation of all services providers operating on the VFA space; licencing of all requirements and obligations of ICO issuers or those companies providing any kind of services to ICOs; structuring and implementing the financial instrument tests, identifying the minimum disclosure requirements for ICO whitepapers, control on marketing and advertisement of VFAs.

The law attests that every ICO better named by law as “initial virtual financial asset offering” or “initial VFA offering” needs to pass the Financial Instrument Test to be presented to the MFSA. The Financial Instrument Test is led by VFA Agents, which have to undergo a test to obtain a license from the respective authority. The law states that the VFA Agent is to be a source of guidance between the VFA issuer or the VFA service provider applicant, acting as a contact person between the MFSA and the client.

On the other hand, the ITAS is defined as “a regulatory framework which will be set up for the registration of Technology Service Providers (System Administrators and Auditors) and the certification of Technology Arrangements.” Its role is to “provide for the regulation of designated innovative technology arrangements referred to in the Act, as well as of designated innovative technology services referred to in the Act, and for the exercise by or on behalf of the Malta Digital Innovation Authority of regulatory functions with regard thereto.”

The ITAS provides a liaison with the MDIA. Its purpose is to seek all relevant authorisation by the MDIA.

Operating in Malta, E&S Group adheres to the Maltese laws with regards to ICOs, cryptocurrency exchanges and tokenomics. If you require further information contact us by sending an email on [email protected]. We make things happen!

 

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