The Malta Financial Services Authority (MFSA) Releases A Security Token Evaluation

News / 26.02.2020

On February 25, The Malta Financial Services Authority provided a paper highlighting 18 industry stakeholders’ feedback on security token offerings (STO).

The MFSA in July 2019, requested the stakeholders to help interpret and advise on the definition of STOs, and their basis for legal existence. 

However, the published paper gives good feedback on the definition of security tokens and the possible ways of addressing the issues facing the assets within the Maltese market.  However, most respondents disagreed with the MFSA proposal of categorizing different types of STO. 

Most respondents suggested that categorizing the STOs will pose arbitrage risks since the EU law’s transferable securities concept world. 

A suggestion popped up for creating a new framework to cater to the transferable securities that leverage the distributed ledger technology. 

Other respondents highlighted that Malta should find ways to accommodate crypto assets classification suggestions given by the Block Research Institute. Others suggested that the asset classification should be based on blockchain technology and a project’s primary infrastructure. 

Moreover, the paper highlighted other issues like double-checking and verifying transactions, obligations of managing securities, and other solutions. 

Due to the industry-friendly policies set, Malta is commonly claimed to be a blockchain island. However, many crypto startups still find it hard to get financial services since the regulatory platforms work slowly. 

Earlier, some banks began turning away firms that were not ready to support such ventures and only served those adhering to MFSA’s full regulation. 

Recently, reports arose that Binance did not get authorized to operate in Malta since the MFSA claimed not to approve the platform.

Dacosta Osei-Tutu, a first degree holder in Nursing, who couples his Nursing career with blockchain blogging, has a great passion for the blockchain technology and aims to play a vital role in applying this revolutionary technology to disrupt the healthcare system in Africa.