MFSA Answers Malta Token Issues

The Malta Financial Services Authority (MFSA) has issued a statement responding toissues regarding the offer of stock tokens on the island.

Malta financial regulator replied in a documentto the main questions received from participants in the cryptocurrency market about how problems arising from the offer of token-shares (STOs) "can be solved in a way that does not stifle innovation."

In July 2019, the process was launchedconsultations aimed at establishing “legal certainty” and identifying blockchain-based securities industry problems in the Maltese financial markets. The consultation ended in September 2019, when MFSA received feedback from 18 industry participants, including national agencies, consulting and law firms, as well as technology suppliers.

MFSA focuses on STO's implicationswithin the framework of the legislation of the European Union, including the directives “Markets of financial instruments” and the “Regulation on market abuse”. In its conclusion, the regulator notes that the settlement of settlements on the basis of a distributed registry could provide a “workable solution”.

Management adds that according to somerespondents, if at the EU level there are no changes associated with the rules of the Central Securities Depositories (CSD), there are obstacles to the introduction of technology.

Existing regulations require that transferablesecurities listed on the trading floor were registered in CSD magazines. This means that the ambitions of projects to eliminate the depository as an intermediary from operations are impossible without the "optimization" of legislation for distributed registries.

The Office also notes that although respondents provided a lot of feedback on transactions related to securities, little was said about the monetary side of the calculations.

“Certain issues must be resolved before the secondary market trading equity tokens can actively develop,” — writes the regulator.

Last week, the MFSA reported that Binance is not regulated by local authorities and is not licensed in Malta. At the same time, Changpeng Zhao denies the presence of headquarters in Malta.

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