The Malta Financial Services Authority (MFSA) has issued a statement providing answers to questions regarding token offers on the island.
In the document, Malta's financial regulator responded to key questions received from the cryptovoltaic market participants on how problems arising from token offerings (STOs) "can be solved in a way that does not stifle innovation".
In July 2019, a consultation process was launched aimed at establishing "legal certainty" and identifying problems in the securities industry through a blockbuster in the Maltese financial markets. The consultation ended in September 2019, when the MFSA received feedback from 18 industry players, including national agencies, consulting and law firms, and technology providers.
The MFSA focused on the implications of STO under European Union law, including the Markets in Financial Instruments Directive and the Regulation on Market Abuse. In its opinion, the regulator notes that settlement on the basis of a distributed register could provide a "workable solution".
The regulator adds that, according to some respondents, if there are no changes at EU level related to the CSD rules, there are obstacles to the implementation of the technology.
Existing rules require transferable listed securities to be registered in CSD registers. This means that ambitions to eliminate the depositary as an intermediary from transactions cannot be achieved without 'optimising' the legislation for distributed registries.
The Office also notes that while respondents provided a lot of feedback on some securities-related transactions, little was said about the monetary side of the settlements.
"Certain problems must be resolved before the secondary market that trades tokens shares can actively develop", — the regulator writes.
Last week the MFSA reported that Binance is not regulated by local authorities and is not licensed in Malta. However, Changpen Zhao also denies having a headquarters in Malta.
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