- 70% drop in number of companies seeking crypto regulations
- Harsh regulations and high costs curtailed the aspirations of many
- Malta has lost the opportunity to cement its place as a blockchain hub
Malta’s desire to be one of the first ‘blockchain islands’ looks like it has vanished along with its tourists following a 70% reduction in crypto firms seeking licensing. Malta Today reports the incredible drop in the number of blockchain companies looking to comply with recently introduced legislation, suggesting that the country’s vision has been hamstrung by complex legislation and potential greed.
Malta’s Missed Opportunity
Malta talked of being a blockchain island as far back as 2018, with its generous cryptocurrency taxation lending itself to being a hub of innovation for the sector. This was emphasized by the arrival of the likes of Binance and Bittrex, but the growth of the blockchain sector and the amount of criminal activities that accompanied the lax tax laws meant that regulations were inevitable, although these were talked up as another step along the road to legitimizing the industry.
By October 2018 the ship was already sailing off course when the Maltese Financial Service Authority warned crypto companies to wait for regulations before pushing ahead, and the entire enterprise ground to a halt when the supposedly crypto-friendly regulations were introduced the following month and found to be anything but.
Complex and Expensive Application Process
The application process was complex to navigate and was liberally sprinkled with high fees, not least due to the necessity to work with one of the few authorized agents in the country. This led to a number of crypto companies shutting up shop or, like Bittrex, leaving the country to continue with operations.
All of this means that the news that some 70% of firms that once gave notice of an intention to file for a Virtual Financial Assets license have now dropped their interest is not a surprise, with 26 pursuing the licensing process – none of which are actually licensed in the country.
Malta had the opportunity to steal a march on much bigger nations and become a genuine blockchain hub for Europe, but sadly it seems like a series of rushed and ultimately restrictive regulations, potentially spurred on by the thought that they could milk the crypto cow for all that it was worth, have seen the opportunity slip quietly into the Mediterranean.