GTG Advocates presents to you all you need to know about Malta's adaptation of MiCAR

The Markets in Crypto-Assets Act (MiCAR) establishes a comprehensive regulatory framework for crypto-assets within the EU, addressing issuance, authorization, and oversight of electronic-money tokens (EMTs), asset-referenced tokens (ARTs), and other crypto-assets. This regulation is significant as it creates clear rules for market participants, sets compliance fees, and introduces measures to prevent market abuse, solidifying Malta’s position as a crypto-friendly jurisdiction aligned with EU standards.

Malta’s adaptation of MiCAR is crucial for enhancing legal certainty in the crypto market, fostering investor protection, and supporting sustainable growth in fintech by allowing entities a structured path for compliance and authorization within the rapidly evolving digital asset space.

MiCAR - By Dr Cherise Abela Grech

The Markets in Crypto-Assets Act has just been enacted, implementing the bill that was issued earlier this year to implement the relevant provisions of Regulation (EU) 2023/1114 on markets in crypto-assets (MiCAR) into Maltese law.

In line with MiCAR’s timelines, parts of the Act, primarily those relating to electronic-money tokens (EMT) and asset-referenced tokens (ART) are deemed to have come into force retroactively on 30th June 2024 whereas the remainder of the Act will come into force on 30th December 2024.

In line with MiCAR’s provisions, the Act seeks to regulate:

• The issue of crypto-assets other than ARTs or EMTs and the requirements in relation to the drafting and notification of the white paper for a public issue
• The public issue of ARTs and the authorisation process in relation to such issue primarily applicable to credit institutions
• The public issue of EMTs by credit institutions or electronic money institutions which does not require prior approval of the white paper by the MFSA as the competent authority nor of any marketing communications relating thereto, before their respective publication
• The authorisation requirements and process for crypto-asset service providers
• The provision and prohibition of market abuse

Together with the Act, the Markets in Crypto-Assets Act (Fees) Regulations (hereinafter “the MiCAR Regulations”) have also been published. The MiCAR Regulations, in line with MiCAR’s provisions, set out the types of crypto-asset services that can be provided:

The MiCAR Regulations also set out the fees that will be due to the Malta Financial Services Authority (MFSA) in its capacity as the competent authority in Malta in relation to activities that are regulated under MiCAR.

Fees relating to an offer of crypto-assets

An offeror, a person seeking admission to trading, or an operator of trading platforms for crypto-assets other than ARTs or EMTs, as applicable, who is submitting the notification of a crypto-asset white paper to the MFSA is required to pay a notification fee of €2,500. This also applies to crypto-assets other than ARTs and EMTs that were admitted to trading before 30th December 2024 and operators of trading platforms submitting a notification to the MFSA in relation to any such crypto-asset. The submission of a notification of modification to a crypto-asset white paper is subject to payment of a €1,000 modification fee.

Issuers of EMTs are required to pay a notification fee of €3,000 when submitting the notification of their crypto-asset white paper to the MFSA and are also subject to the same €1,000 modification fee.

In the case of credit institutions submitting a crypto-asset whitepaper in relation to an ART, they are required to pay the MFSA a €3,000 assessment fee. Where legal persons or other undertakings, other than credit institutions intend to offer to the public or seek the admission to trading of ARTs, they are required to pay an application fee of €8,000 when submitting their application for authorisation.

Fees relating to the provision of crypto-asset services

In the case of applications for authorisation as a crypto-asset service provider (CASP), the following application fees shall be due. The MiCAR Regulations also offer a reduced fee for those VFA service providers who are already authorised by the MFSA under the VFA Act by 30th December 2024 and who then seek to apply for a CASP licence under the simplified procedure:

Where a VFA service provider intends to provide crypto-asset services falling under different classes, only the highest application fee applicable with respect to those crypto-asset services will apply.

Where a legal person or undertaking authorised to act as a CASP under MiCAR intends to provide one or more crypto-asset services in addition to those which it is authorised to provide, it shall, upon the submission of an application to the MFSA to modify its authorisation accordingly, pay an application fee as established above, with a 25% reduction. Where the CASP intends to stop providing one or more, but not all, of the crypto-asset services for which it is authorised, such request for modification shall be subject to a modification fee of €1,000.

CASPs authorised by the MFSA shall also be subject to the following annual fees:

As in the case of authorisation fees, where the CASP is authorised to provide crypto-asset services falling under different classes, the highest amount payable shall be due to the MFSA.

The term “transaction volume” is defined as the aggregate of the following, as applicable:

(a) the quantity multiplied by the value, in euro, of all orders transmitted as reported in the annual return for the preceding year;

(b) the quantity multiplied by the value, in euro, of all executed orders as reported in the annual return for the preceding year;

(c) the quantity multiplied by the value, in euro, of all orders for the exchange of crypto-assets for crypto-assets other than asset-referenced tokens or for executed

funds, as reported in the annual return for the preceding year; and

(d) the quantity multiplied by the value, in euro, of all orders matched on a trading platform for crypto-assets, as reported in the annual return for the preceding year.

The first annual fee due shall be the aggregate of the annual supervisory fee and the crypto-asset service fee prorated according to the period remaining between the date when a legal person or undertaking is granted authorisation to act as a CASP and the end of the calendar year in which such authorisation was granted; and the same fees prorated according to the period between the start of the following calendar year and the date when the next supervisory fee is due. This first annual fee shall be due to the MFSA on the date of issue of CASP authorisation and every annual fee thereafter shall be due annually on the 30th of July.

Together with the MiCAR Regulations, the Government has also approved the Virtual Financial Assets (Amendment No 2) Regulations which amend the current Virtual Financial Assets Regulations (hereinafter “the VFA Regulations”). This amendment seeks to remove the fees currently set out under the VFA Regulations in relation to the registration of whitepapers and application for a licence to provide one or more VFA services.

The amendments also include specific provisions allowing for a pro-rata refund of the annual supervisory fee when a VFA service provider licence is cancelled automatically on 2nd July 2026 or owing to the grant or refusal of an authorisation under MiCAR, whichever comes first. The same pro-rata refund is applicable for the deregistration of white papers relating to EMTs or of a VFA other than an EMT or ART which have been registered in line with MiCAR by the MFSA.

As the 30th December deadline fast approaches, it is essential that entities that fall under MiCAR’s remit ensure compliance with this new EU-wide regulatory framework. Malta, with its established legal infrastructure, robust regulatory environment, and forward-thinking approach to blockchain and fintech, continues to stand out as the ideal jurisdiction for aligning with MiCAR requirements.

Author: Dr Cherise Abela Grech

For information or assistance, please contact us at info@gtg.com.mt