Malta Chamber of Commerce business unit responds to allegations of lax crypto oversight

A business unit within Malta’s Chamber of Commerce has struck down allegations that the country failed to uphold proper regulatory oversight of cryptocurrency businesses in its early embrace of the industry in 2017 and 2018. 

The Virtual Financial Assets Agents Business Unit of the Malta Chamber of Commerce responded to a Sunday report from the Times of Malta alleging that global financial regulators are concerned about money laundering and lax regulatory oversight of crypto businesses within the country. Specifically, sources close to a recent Financial Action Task Force meeting in Paris told the daily newspaper that regulators believe Malta’s fast-tracking of crypto businesses came at the expense of proper due diligence.

“It must be reiterated that the VFA Framework, which falls under the responsibility of the MFSA as competent authority in terms of the VFA Act, regulates the crypto industry at a very high standard,” the Agents said in a written response that was shared with Cointelegraph. They continued:

“The licensing process, which is managed by the MFSA, is very rigorous, with a double-layered approval system consisting of licensed VFA Agents and the MFSA itself ensuring that only legal entities operating at a highly qualitative level are approved by the MFSA and allowed to operate in Malta.”

The VFA Framework refers to the Virtual Financial Assets Act, which was passed into law on November 1, 2018. MFSA is an acronym for the Malta Financial Services Authority, the country’s single regulator of financial services.

The Virtual Financial Assets Agents group was established in 2020 by the Chamber of Commerce to put forward new proposals for improving the country’s VFA Act. The Agents represent a unified body of industry stakeholders that ensure the VFA Framework is upheld and propose solutions to existing challenges within the sector.

Related: $71B in crypto has reportedly passed through ‘blockchain island’ Malta since 2017

In their response, the Agents also said it is “absolutely incorrect, both in fact and in substance, to infer that Malta has ‘lax oversight’” when the MFSA has consistently applied supervision of the sector.

Their response also addressed the negative portrayal of the 12-month transitory period for new crypto enterprises that landed in Malta. “It is common practice, even at EU level, to set a transitory period when new regulatory requirements are rolled out and imposed on an industry,” they said.

The Agents also threw cold water on the threat of money laundering, claiming that public-ledger cryptocurrencies such as Bitcoin (BTC) are highly effective in combating crime.

Malta has no plans to slow its adoption of digital assets anytime soon. In June 2020, the country broadened its blockchain ambitions to pursue digital assets more holistically.