Initial Coin Offerings / Token Generation Events / Security Token Offerings
2017 saw the emergence of initial coin offerings which provided an alternative method for projects to raise capital and implement their ideas. In return for pecuniary contributions, such projects issued tokens to the investors which would entitle the holder to certain rights, including the access to products and services which typically would be available through the DLT platform of the issuer.
Malta was amongst the first jurisdictions to see the potential in this new emerging industry and embarked on a legislative journey to provide this sector a much needed regulatory framework which would provide the previously missing legal certainty affecting issuers, as well as affording protection to investors participating in such events.
At CSA Group, we are able to provide you with a one-stop solution. The first step towards carrying out such a project is to identify which legislative framework would be applicable. This is only achievable through a specialised legal opinion which would be prepared by our in-house team of legal professionals. Based upon that, you would be placed in the ideal position of deciding whether Malta is the right jurisdiction for you.
Cryptocurrency Exchanges and Other Service Providers
The inception of cryptocurrencies saw also the emergence of intermediaries having the aim of facilitating the adoption of this technology by users worldwide. Be it cryptocurrency exchanges, OTC desks, brokers, investment advisors, custodians or wallet providers – the Maltese legislative framework has been designed in a way which would cater for all these activities that directly involve the interests of third parties. Depending on the type of assets dealt with and the extent of the services provided, different capital requirements and licences would apply.
At CSA Group, we are able to provide you with high-quality advice which would be crucial when setting up your operations from Malta. Be it from a legal, tax or a corporate standpoint, we would be to assess any regulatory implications directly affecting your business through our team of professionals all experts in their own field.
Funds Investing in Cryptocurrencies
Malta has put in place supplementary conditions for Professional Investor Funds seeking to invest in virtual currencies and other cryptocurrencies. This has attracted the interest of various international funds seeking to diversify their portfolios by providing their investors with the option to partake in funds specifically active within this new and emerging industry of blockchain and cryptocurrencies. Such Collective Investment Schemes are required to obtain a licence prior to operating from within Malta upon successfully satisfying all of the requirements applicable by law.
At CSA Group, together with our affiliates and partners, we are able to provide you with the ideal partner leading up to the application stage. We would be able to assist you with preparing the application file and other offering documents.
VFA Agent Services
CS Fintech Services Limited has applied to become a registered VFA Agent with the Malta Financial Services Authority. Any issuer seeking to offer a virtual financial asset to the public in or from within Malta, or to apply for an admission to trading on a local licensed DLT exchange, must appoint a recognised VFA Agent to facilitate such process with the regulator. Namely, the VFA Agent would be responsible to advise and guide the issuer as to its responsibilities and obligations to ensure compliance with all applicable legislation, and to submit to the competent authority all required information and documentation as stipulated by law. Furthermore, the VFA Agent, which will be appointed on an on-going basis, will act as liaison between the issuer and the competent authority on all matters arising in connection with the registration of the whitepaper or the trading of the issuer’s virtual financial assets on a DLT exchange. Moreover, the VFA Agent will be responsible to review and submit to the competent authority on behalf of the administrators of the issuer on an annual basis a certificate of compliance.
In the case of VFA Service providers, they will also be required to appoint a VFA Agent in order to submit an application with the competent authority. Whilst similar duties and obligations arise in relation to acting as such, the role of the VFA Agent will cease upon the issuance or otherwise of the licence.
System Audits and Other Technology Services
The legislative framework put in place through the Innovation Technology Arrangements and Services Act, platform operators and smart contract developers are able to obtain certifications that a system audit has been conducted on a particular technology arrangement. In this respect, CSA Group has partnered up with Concise to provide such services to our own clientele and beyond.
We are able to express an opinion on whether a description of a technology arrangement is fairly presented and whether the controls included in the description are suitable designed to meet the applicable criteria. This type of audit is typically carried out when an innovative technology arrangement is in the process of applying to be certified by the competent authority. Moreover, we may also provide an added opinion on the operating effectiveness of the controls during the period covered by the audit. The latter is typically required to be carried out during the operational lifetime of the technology arrangement in question or upon the request of a competent authority in Malta.
Apart from the above, we are also in a position to provide the following services:
- Blockchain architecture, engineering and consulting;
- dApps and tokens development; and
- Smart Contract Development and integration.
If you are interested in learning more about any of the above blockchain advisory services, please get in touch by sending an email on [email protected]. Our team is ready to answer any queries which you might have and to guide you in the right direction.
