Virtual Currencies & ICOs In Malta – State Of Play

It is fair to say that virtual currencies ("VC") and initial coin offerings (ICOs) have been all the rage in 2017 and, while many of the more well-renowned VCs have lost more than 50% of their value in the first quarter of 2018, this new digital asset phenomenon has not shown any signs of relenting.

Although Maltese law does not currently have a legal definition of VC, practitioners generally use the Financial Action Task Force (FATF) definition which is essentially "a digital representation of value that can be digitally traded and functions as a medium of exchange, unit of account or store of value, but does not have legal tender status in any jurisdiction". These "assets" are unregulated, decentralised, and not issued or guaranteed by a central body or authority in any country. In fact, a virtual currency only fulfils these functions based on an agreement or understanding between the community of users of the virtual currency in question.