Maltese Legal Framework for Distributed Ledger Technology Platforms
A Consultation Paper entitled “the establishment of the Malta Digital Innovation Authority; the Framework for the Certification of Distributed Ledger Technology Platforms and Related Service Providers; and a Virtual Currency Act” was issued on the 16 of February 2018 by the Government of Malta. Interested parties are requested to provide feedback regarding the consultation paper, found here, by the 9 March 2018.
The proposed legislation, presents a conceptual framework for Distributed Ledger Technology (“DLT”) Platforms to be subject to certification in Malta. This framework also considers the need to oversee the principal service providers to DLT Platforms. Separately through the Malta Financial Services Authority (“MFSA”), the frameworks extends to issuers of initial coin offerings, as well as intermediaries that act as brokers, exchanges, wallet providers, asset managers, investment advisors and market makers in relation to virtual currencies that fall outside any existing financial regulation.
The proposal mentions that Malta will issue three separate pieces of draft legislation, these are:
- The Malta Digital Innovation Authority Bill (MDIA)- which will provide for the establishment of an Authority to be known as the MDIA;
- The Technology Arrangements Service Bill (TAS)- a regime which will be set up for the registration of Technology Service Providers and the certification of Technology Arrangements; and
- The Virtual Currencies Bill (VC)- which will set out the framework for Initial Coin Offerings (“ICOs”) and the regulatory regime on the provision of certain services in relation to VCs.
The MDIA will focus on innovative technology arrangements and their uses which means that Malta can be at the forefront of taking advantage of new technology arrangements while concurrently protecting public interest. The TAS Bill will set out the legal framework for technology arrangements and their administrators and auditors of technology arrangements related to smart contracts.