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This short review focuses on the letter published by the MFSA, Malta’s number one financial regulator, a couple of months ago. In it, it explains the main provisions of the VFA Law & sets forth requirements for issuing VFAs in Malta. 

So, let's take a closer look at it.

What are Virtual Financial Assets (VFA)?

Basically, they’re a type of assets on a distributed ledger that don’t qualify as any of the below means of payment:

  • e-money;
  • financial instruments;
  • virtual tokens;

The above are also considered DLT assets.

Malta: Financial Instrument Test

Determining whether an asset is a virtual token, VFA, e-money or financial instruments requires applying the financial instrument test in Malta. The test is a set of questions for the applicant which help determine the nature of their asset. Should the test indicate that an asset is a virtual token, the new legislation won’t be applicable to it. Pursuant to the new law, a virtual token is an asset that cannot be sold outside its platform, nor converted into another asset. It’ll be recognized as an VFA on a residual basis if it doesn’t qualify for other assets. 

VFA-Related Activities

The Act regulates the following areas:

  • issuing VFAs
  • applying for an VFA license in Malta;
  • agents’ activities;
  • terms for providing VFA services in Malta;
  • VFA agents.

The agent’s role lies primarily in advising clients & mediating between clients & Malta’s financial regulator. Pursuant to the act, there’s three types of agents:

  • issuers’ agents;
  • applicants’ agents that solicit in obtaining an issuer license in Malta;
  • individuals involved in both types of activities.

Carrying out agency activities in Malta requires going through the registration procedure.


Issuing a VFA in Malta requires no registration, nor does it require compliance with any licensing requirements. However, the issuers must register a VFA in Malta. If VFAs of the same type are issued in several tranches or if several different VFAs are put into circulation in a single tranche, their issuers will only have to register VFAs in Malta once.

VFA-Related Services

Regardless of the nature of VFA-related services, their providers must obtain an VFA license (if they provide VFA services in Malta). Services are divided into 4 classes. Also, obtaining a VFA license requires using the services of an agent.

The law also covers establishing VFA exchanges in Malta. Pursuant to it, VFA exchanges can only carry out 3 types of transactions:

  • exchanging VFAs for VFAs in Malta;
  • exchanging VFAs for fiat currencies in Malta;
  • exchanging fiat currencies for VFAs in Malta.


The Act also establishes a number of AML requirements. In particular, it obliges VFA service providers, agents & issuers  to comply with the AML requirements contained in the EU Directive on money laundering.


For more information & advice on VFA in Malta or other jurisdictions, please contact IQ Decisions UK. Our legal advisors will be happy to lend you a helping hand with any legal challenges you might be facing in that regard.