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From the Game of Thrones to Gladiator, Malta has repeatedly been the backdrop for some of the most epic stories in film history. This should come as no surprise for those who have visited the small, sun-drenched European island. Its ancient buildings and Mediterranean beaches are enchanting, even when bustling with tourists and modern 5-star hotels.
But given the latest developments in the country’s regulatory framework for crypto, Malta could also be the setting for the historic rise of cryptocurrencies as well.
Last month, Malta made history by becoming the first jurisdiction to provide regulatory certainty to the blockchain space, through the passing of a series of special laws. These laid out the regulatory framework for ICOs, cryptocurrencies and the process for setting up crypto-related businesses in Malta.
These laws aim to bring greater transparency and investor protections to the crypto market, something the industry has desperately needed after numerous scams and frauds in 2017.
The government in Malta is eager to see what crypto-related businesses can do for the island’s economy, and optimistic that they will bring in more jobs and help boost the economy.
As the Prime Minister of Malta said himself, “We aim to be the global trailblazers in the regulation of blockchain-based businesses and the jurisdiction of quality and choice for world class fintech companies.”
And it’s working. Binance and OKEx, two of the world’s largest crypto exchanges, have recently announced moves to Malta. And dozens of other heavy-hitting industry players are looking to follow suit.
On making the move, CEO of Binance, Changpeng Zhao, said: “We are convinced that Malta will be the next hotbed for innovative blockchain companies, and a centre of the blockchain ecosystem in Europe.”
What does this mean for Crypto Law Insiders?
For Crypto Law Insiders, it should be no surprise that crypto-related businesses would be drawn to such a crypto-friendly nation as Malta. As we’ve discussed before, entrepreneurs and investors go where they are treated best.
After all, why operate your business in a country that doesn’t provide regulatory certainty when you can operate in a European paradise that does?
To maximize the success of your business, entrepreneurs need an environment with clear laws, low taxes, and relative ease of doing business. With all of that plus great weather and English as an official language, Malta is a very logical choice.
That said, Insiders know all too well how fickle governments can be when it comes to crypto.
Given Malta’s tiny size and dependence on other EU powers, it is not guaranteed that it will be able to maintain their full crypto-friendly status.
For years, the country has been under siege by EU countries upset by Malta’s low tax rates. And just one week after Malta’s enactment of its new crypto friendly laws, Europe’s top banking watchdog accused the country of failing to enforce EU anti-money laundering rules. Consider that a warning shot as EU regulators decide how to officially respond.
Despite the government’s desire to become a crypto haven, much depends on the will of their powerful and less crypto-friendly neighbors.
The bottom line is that while Malta is an ideal option for basing a crypto-related business, as an Insider it’s important to be cognizant of the regulatory realities and the possibility that doing business from Malta can become more difficult as EU powers attempt to discourage businesses from moving there.