Malta, the 'Blockchain Island': First Country to Establish a Full Regulatory Framework for Distributed Ledger Technology

On Wednesday (4 July 2018), the Parliament of Malta, an island nation that is part of the European Union, unanimously approved three bills that regulate Distributed Ledger Technology (DLT), making Malta the first country to provide legal certainty in this space.

The three bills passed by "The House" on Wednesday evening, just before summer recess, are the Innovative Technology Arrangements and Services Bill (Bill No. 43), Virtual Financial Assets Bill (bill No. 44), and the Malta Digital Innovation Authority Bill (Bill No. 45). 

This is how Joseph Muscat, Malta's Prime Minister, announced the news on Twitter:

The man he refers to in this tweet, Hon. Silvio Schembri, is the Junior Minister (or Parliamentary Secretary) for Financial Services, Digital Economy and Innovation.

Before these bills were approved, several crypto exchanges, including Binance, BitBay, and OKEx, had announced their intention to move their base of operations to Malta.

Silvio Schembri said in a press release:

"This marks an important milestone through which companies will be provided with the necessary tools to operate in a regulated environment. This will put minds at rest for investors and whoever uses this new technology that is likely to change the world. I am optimistic that further companies will choose Malta to operate from with a system that offers stability and that will eventually result in further economic growth."

Jean-Ph Chetcuti, the co-founder and managing partner at Chetcuti Cauchi, a Maltese law firm, said in an interview:

"We now have a comprehensive framework for the blockchain industry to grow and flourish in Malta. This is a momentous milestone for Malta as a forward-looking economy, truly confirming Malta as the 'Blockchain Island'. We now have ample legal certainty for existing and new DLT projects. The larger crypto operators we have been speaking to in the last months are more comfortable committing to further investment and they are setting up in Malta."

 

Featured Image Credit: Photo by "Giuseppe Milo" via Flickr; licensed under "CC BY 2.0"

Three Cryptocurrency Firms Are Shutting Down Over New Anti-Money Laundering Regulations

A total of three cryptocurrency firms have announced they will be shutting down over the introduction of the AMLD5 European Union regulation that’s coming into effect on January 10, 2020.

As CryptoGlobe reported, the first firm to announce it was shutting down was Bottle Pay, which provided its users a service to send cryptocurrency via social media accounts. It will be shutting down after “seeing huge growth in user numbers over the last few months” and raising $2 million in a seed funding round.

Bottle Pay reportedly decided to shut down as the new regulations would “alter the current user experience radically, and so negatively” that to maintain their “integrity as service providers” and to protect its users, it decided to shut down.

Now, TheBlock reports two more firms, a cryptocurrency mining pool and a bitcoin gaming platform, are shutting down over the same regulations. The mining pool, Simplecoin, published a notice on its website revealing it will shut down not to implement know-your-customer (KYC) and anti-money laundering (AML) checks on its service, to protect users’ privacy.

When the laws come into effect, we would be forced to require you, the users, to identify yourselves for anti money-laundering purposes. We have been searching for solutions for a while, but it has become apparent that there is no way around it. (…) Mining should to be available to anyone and we refuse to jeopardise our users’ privacy.

Simplecoin’s co-founder, Christian Grieger, revealed the firm has 42,000 users and two employees. Its users have until December 20 to withdraw their funds and until December 31 to delete their account information.

The gaming platform, Chopcoin, is also co-founded by Grieger, is shutting down over the same regulation as it imposes stringent report obligations on the firm and would allow Financial Intelligence Units to obtain the addresses and entities of its users. Chopcoin had 305,000 users and two employees.

Featured image by Cristina Gottardi on Unsplash