How to get Cryptocurrency License in Malta

Up until 2018, when new restrictions were implemented, Malta was one of the most loyal and promising nations for blockchain and crypto-services firms. As the legal structure improved and became more clear, the larger exchangers sought to locate offices there.

Due to the more stringent requirements enacted in 2018, the Malta Financial Services Authority currently only provides licenses in exceptional circumstances. For example, it has awarded Moneybite, a Maltese firm, a Class 3 license to facilitate cryptocurrency payments. Unfortunately, obtaining a license remains a challenge for international enterprises, particularly when it comes to cryptocurrency exchanges (class 4 license is required). Even if obtaining a license is not fully simple at the time, it is achievable if a number of conditions are met as the regulator anticipates.

To be more specific, the legal framework for conducting cryptocurrency transactions was established through the approval of three main legislation acts, the implementation of which began in the autumn of 2018. The guidelines explain the legislation governing cryptocurrencies and ICOs, as well as the prerequisites for crypto projects and the legalization process. Here are the main points of these legal acts.

Crypto governing acts in Malta

Malta's cryptocurrency regulations are as follows:

• Virtual Finance Act, 2018: The VFA act is the primary piece of legislation controlling the country's virtual financial assets. The statute mandates the use of white paper, licensing requirements, advertising, and other sorts of liability. The legislation also specifies the relevant principle for the trade of virtual financial assets.
• Malta Digital Innovation Authority (MDIA) Act: The Malta Digital Authority Act was created to certify cryptocurrency enterprises, register service providers, and use DLT. The Malta authority act also creates the Malta Digital Innovation Authority, which will oversee the certification and registration process and is also in charge of enforcing consumer and investor protection regulations.
• Innovative Technology Arrangements and Service (ITAS) Act: The ITAS act establishes the principles for recognizing and certifying DLT (Distributed Ledger Technology) platforms. Furthermore, it permits the registration of rims wishing to do an exchange transaction. The legislation also governs service providers' interactions with system auditors and technical administrators.

According to the VFAA, no company may offer a VFA service in or from Malta's jurisdiction unless it is licensed by the Malta Financial Services Authority. The VFAA act governs a wide range of VFA services and providers, including order reception and transmission, order executions on behalf of third parties, dealing with own accounts, nominee and custodian services, portfolio management, VFA placements, investment advice, and how the VFA exchange operates.

Despite the fact that the MFSA is the primary regulator for VFA service providers and services, specialized disruptive technologies like as smart contracts and DLTs are submitted to the Malta Digital Innovation Authority for additional examination and certification.

Company's Requirements

Before applying for and receiving a license to trade bitcoin, service providers must satisfy the following standards.

• The applicant's statutory capital should be at least 730,000 euros.
• The applicant firm maintains a physical presence in Malta.
• The requirements of the regulator must be met by the director, top management of the firm, and the KYC/AML officer.
• At least two people must serve on the company's board of directors or as directors.
• The presence of an AML/KYC officer

There are four types of financial licenses. Cryptovirges come under the fourth category, which includes all VFA service providing and the control or storage of customers' cash in conjunction with VFA service supply.

How can I obtain a Malta Crypto License?

• A VFA agent should be appointed.
• Create a whitepaper
• Make a business strategy.
• Register the firm and recruit employees
• Finish the MFSA due diligence
• Submit an application for preliminary approval.

Malta's taxation of cryptocurrency companies

The money made through crypto operations is the company's profits. The corporate profit tax on a crypto firm in Malta is 35% and is paid to the applicable tax authorities by the licensee on earnings obtained from the performance of services. It is crucial to remember that a variety of tax exclusions can be utilized in each given scenario, lowering the corporation tax payable.

Fees for acquiring a cryptocurrency exchange license in Malta

The application for a crypto exchange license costs EUR 12,000. A charge of EUR 25,000 is also levied on earnings in excess of EUR 1 million. We remind you that the VFA Class 4 license is the most crucial and permits an entrepreneur to deal with and handle money, virtual financial assets, and cryptographic keys of individuals working in digital money enterprises in Malta.

Malta crypto license application

A registered VFA agent must be appointed by an entity requesting a VFA license. The MFA may grant or deny a license that may be generic in scope or confined to the supply of certain services to the VFA. MFSA must constantly check that:

• The applicant (including its beneficial owner, qualified owner, members of the administrative board, or any other person who administers the applicant's business) is eligible for delivering acceptable services to the VFA and is in compliance with the VFA Act and other applicable regulations and rules.
• If the applicant is a natural person, the applicant is a Maltese resident.
• If the applicant is a legal person, it is either founded in Malta or in accordance with Maltese legislation or recognized jurisdiction and has a branch in Malta. Its aims or objectives should be confined to operations as a licensee and the performance of auxiliary or secondary activities, and should not include goals or objectives that are incompatible with the services of the licensee's VFA. Incompatible purposes or facilities include any action that needs MFA authorization under Maltese legislation, excluding the VFA Act; and
• Its current operations are compatible with and connected to VFA services.

A license may be awarded subject to any restrictions judged acceptable by the MFA, and it may later be canceled or new terms imposed. The Ministry of Foreign Affairs decisions to grant or reject a license will be based on its objectives of safeguarding investors and the public, protecting Malta's brand, supporting innovation and competition, and maintaining the applicant's and linked parties' reputation.

Perks of acquiring Malta’s Crypto license

• All crypto experts must have high-level licensing.
• A clear and transparent procedure
• Provide financial guidance and consultation in the cryptocurrency business.
• Reputable jurisdiction in the IT and FinTech sectors
• Gain trust and sell yourself as a regulated crypto firm.

Final Words

Malta is regarded as a cryptocurrency startup hotspot. As the first country to offer blockchain technology, it has established a global leadership position. The country's solid approach is creating a perfect environment for numerous cryptocurrency enterprises throughout the world. Furthermore, the time necessary to establish a cryptocurrency exchange development company in Malta is lower than in other European nations. Malta is a crypto-friendly jurisdiction, but it also demands that the corporation choose a VFA agent who will be the professional service provider. The VFA agent will advise and give information to the regulatory authorities on the company's behalf.