Initial Coin Offering, known as “ICO”, is a relatively new phenomenon that has quickly become the main player in the Financial Services and Crowdfunding industries, as well as being the key subject of discussion in the Blockchain communities. In essence, it is one of the most advanced methods of raising finance from the public and is becoming increasingly popular to fundraise start-ups.
While all jurisdictions are shying away from regulating this industry, Malta has recently introduced a specific regulatory framework for ICOs and has become the first jurisdiction worldwide to regulate ICOs and Blockchain Technology.
This publication in fact seeks to give an overview of the recent laws and regulations relating to ICOs.
Information relating to any ancillary services to cryptocurrencies, including the operation of platforms to exchange such cryptocurrencies, portfolio management and providing investment advice amongst others, is discussed in our brochure: “Malta – Virtual Financial Asset Services – The New Legislation”.
B. TO WHOM DOES THE NEW LAW APPLY?
The new legislation applies to anyone who in or from within Malta:
1. Will offer or issue Virtual Financial Asset(s) (VFA) to the public – i.e. will do an ICO. Such person shall be hereby referred to as
“the Issuer”; or
2. Admit a VFA to trading on a DLT Exchange, whether the exchange is in Malta or not.
Hence, if the asset that is offered to the public or admitted on the DLT Exchange is not a VFA, the new legislation does not apply, and other Financial Services laws might be applicable.