An EU member state – Malta is progressing and is close to introducing a test that will distinguish when assets derived from ICOs are securities. According to a report in a consultation paper on Friday, the Malta Financial Service Authority [FSA] put forth a proposal for a so-called Financial Instrument Test. This will eventually be integrated with the proposed VFAA – Virtual Financial Asset Act. Malta is considered to be very supportive of such innovations and developments and has seen a number of exchanges approaching them, a few of which are mentioned below.
A Twitterati says:
“The proposed test will help to find out if the ICO’s token is a security or utility token”
Steve Tendon says:
“Malta is addressing generation 2″
OKEx, an exchange platform had approached the government to understand the regulatory plans for their new development. The Innovation authority of Malta will provide legal certainty for the use of blockchain technology and digital currencies.
Binance, the exchange giant had also recently approached the Maltanian government to spread their wings in the European region and Malta, a pro-blockchain nation seemed to be a perfect choice. Malta’s existing pro-blockchain legislation and stability offered to financial institutions are what impressed Binance and after several reviews, they were convinced and decided to extend hands.
Tron’s Founder, Justin Sun had also expressed his support to Malta’s prime minister who had a vision of building a blockchain island. He had confirmed the news about Tron expanding to Malta and expressed gratitude to the Prime Minister. They also plan to invest and operate in Malta along with their strategic partner, Binance.
A discussion paper was released last year in November which initially introduced the concept, a test methodology designed on user feedback from the paper. According to the most recent paper, the test is 3 staged – Verify a distributed ledger technology [DLT] asset if it belongs to virtual tokens category; various securities defined by European financial regulators will be applied; a negative result in the second stage will lead to the third stage under which, ICO tokens regulated under proposed VFAA are reviewed.
The paper is open to the public until May 5th and is proposed to cover all ICOs organized in Malta, said the Agency.
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