Initial Coin Offerings (“ICOs”)
Doing Business in Malta
ICOs issued to the public in or from within Malta shall be regulated by the Virtual Financial Assets Act (the ‘VFA Act’) which is expected to become law by November 2018.
The VFA Act aims to regulate Initial Virtual Financial Asset Offerings (or ‘initial coin offerings’ or ‘ICOs’) and Virtual Financial Assets (VFAs). In regard to ICOs, the Act provides that prior to offering a virtual financial asset to the public in or from Malta or applying for a virtual financial asset’s admission to trading on a DLT exchange, an issuer must draw up a whitepaper. The Act then goes on to describe which information must be included in the whitepaper, for example, details of the issuer and information about the offer, amongst others.
Furthermore, this Act prescribes that an issuer must appoint a VFA agent who must be registered with the Malta Financial Services Authority (MFSA) and who must carry out a number of responsibilities towards the MFSA.
Ultimately, by virtue of this Act the MFSA is empowered to introduce and implement a Financial Instrument Test. This Test is made applicable to determine whether a DLT asset qualifies as electronic money, financial instrument, virtual financial asset or virtual token.