Maltese cryptocurrency market regulators said that following a recent peer review by European Union regulators, none of the local licenses issued under the Crypto Asset Regulation (MICA) market were at risk.
A spokesman for the MFSA told Cointelegraph, “Malta’s MICA licenses do not risk revocation or reassessment as a result of peer review results,” adding that authorities have already begun to address issues identified in the review.
The statement comes after the European Markets Agency (ESMA), which oversees MICA compliance, the leading European supervisory body, which released Thursday a peer review of specific MICA certification gaps by the Financial Services Agency of Malta (MFSA).
The MFSA said despite Malta’s continued commitment to close cooperation with EU authorities and some degree of skepticism in the community, its role as an active leader in crypto regulation is not an issue.
Malta is a pioneer in EU crypto regulations
A spokesman for the MFSA said the ESMA report recognized the regulator as a highly effective supervisor.
“This is not surprising given that Malta was a pioneer in cryptography regulations in 2018,” the spokesman said.
“I think this review will portray Malta in a good light. Many forget that Maltese people are completely regulating cusps (crypto asset service providers) before MICA is assumed,” Xreg Consulting partner Nathan Catania told Cointelegraph.
Since introducing three crypto-related bills in 2018, the Maltese government has emerged as a pioneer in European crypto regulations.
“Malta is the first country to regulate DLT (decentralized ledger technology) and crypto assets in this overall way, covering both technical and financial services components,” the MFSA said in a July 2018 statement.
Malta will implement guidance by September 2025
In the review, ESMA outlined some recommendations to the MFSA and other national authority (NCA) of the EU to ensure proper supervision of MICA.
EU regulators specifically emphasized the need to assess CASP’s growth plans in a timely manner, scrutinize the conflicts of interest for multi-service CASPs, and assess risks from exposure to distributed financial finance (DEFI) and unregulated services.
“We believe this review will give more confidence to those considering licensing in Malta and licensing colleagues in regards to the framework for cross-border oversight,” MFSA CEO Kenneth Falgia noted in an official statement in response to the review.
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According to the agency, MFSA plans to fully implement the report’s recommendations by September.
ESMA highlights its impact on NCAS
The ESMA focuses on Malta in its latest peer review, but emphasized that this review covers all NCAs across the EU.
“ESMA tried to confirm the MFSA’s approach to corporate approval and supervision, but did not review the features of any particular company,” an ESMA spokesman told Cointelegraph, adding:
“In the future, ESMA will continue to use peer review tools in relation to other jurisdictions and topics, where appropriate.”
The regulator also emphasized that the peer review includes recommendations to consider in continuing supervisory activities and approval of future procedures.
Maltese code supervision is not used to skepticism
While many perceived ESMA’s peer review of Malta’s crypto surveillance as generally positive, the country’s approach to crypto oversight faces a share of skepticism.
Malta has long pursued its vision of becoming a “blockchain island.” In 2018, crypto platforms are requesting that financial services licenses be obtained. However, in 2020, 70% of first applicants failed to secure their licenses, and many speculated that the rules were too strict.
In 2021, forces within Malta’s Chamber of Commerce dismissed allegations that the country failed to maintain adequate regulatory oversight of its cryptocurrency business.
In 2022, Malta Times also reported that the collapsed crypto exchange FTX has two Maltese registered companies, but said that neither of the MFSA has licensed to provide the service.
Several studies pointed to a “fast and loose approach” to attracting Maltese crypto companies, highlighting that 85% of Malta registered crypto companies left the island after a two-year transition period in 2023.
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