- Malta could be added to a list of countries not doing enough to combat financial crime
- Malta’s push to be a blockchain haven in 2018 could have aided illegal financial activity with cryptocurrencies
- Officials have defended Malta’s current practices, saying they are robust enough
Authorities in Malta have rebuffed claims from the Financial Action Task Force (FATF) that they are not doing enough to stop financial fraud through cryptocurrencies. The FATF met last week to discuss the potential of putting Malta on a list of countries not doing enough to combat financial fraud due to their openness in accepting cryptocurrencies, but Maltese officials have argued that their regulations are robust enough to catch criminal activity.
Malta’s Blockchain Island Dream
Malta’s desire to become one of the first ‘blockchain islands’, which dates back to 2017, encouraged a large number of blockchain and cryptocurrency entities, including Binance and Bittrex, to relocate. It also allowed a huge influx of cryptocurrency into the market, some of it from illegal sources, where it was converted to fiat.
The Maltese Financial Service Authority put a spanner in the plans of the blockchain bodies however by introducing a complex application process months later that put off a huge number of intended applicants, leaving the country in a state of limbo over its status. Malta’s anti-money laundering regime at the time has retrospectively been viewed as “problematic” by experts.
FATF Critical of Country’s Lack of Action
The Times of Malta states that the FATF were critical of the lack of major financial crime cases Malta has pursued given that some €60 billion ($71 billion) in cryptocurrency and other virtual assets has moved through the country since it opened itself since 2017.
Linked to this, the FATF is also concerned about the amount of cryptocurrency and other virtual assets that have been exchanged for fiat currency in Malta without enough oversight, particularly in its early days. Maltese officials defended the country’s actions, saying that their processes are now robust and that the FATF’s €60 billion represents just 2% of global annual transactions.
