{"id":34337,"date":"2025-06-30T08:32:03","date_gmt":"2025-06-30T08:32:03","guid":{"rendered":"https:\/\/dogewisperer.com\/?p=34337"},"modified":"2025-06-30T08:32:03","modified_gmt":"2025-06-30T08:32:03","slug":"like-ordering-mcdonalds-maltas-mica-fast-track-draws-oversight-concerns","status":"publish","type":"post","link":"https:\/\/dogewisperer.com\/?p=34337","title":{"rendered":"‘Like Ordering McDonald’s:’ Malta’s MiCA Fast-Track Draws Oversight Concerns"},"content":{"rendered":"
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Malta, a scenic Mediterranean island with a population of just over half a million, is quickly becoming the preferred European base for high-profile crypto companies like OKX and Crypto.com to come and set up shop.<\/p>\n

Weeks after Europe\u2019s Markets in Crypto Assets (MiCA<\/a>) regime came into force last December, Malta awarded licenses to some of the largest crypto exchanges: OKX and <\/a>Crypto.com<\/a>. Securing a MiCA crypto asset service provider (CASP) license in one country enables firms to operate across the entire European Economic Area, which consists of 30 nations. Most recently, crypto exchange Gemini said<\/a> it was looking to secure a MiCA license in Malta.<\/p>\n

Malta’s rapid embrace of MiCA is drawing both interest and concern. While the CASP rules were created to set high and unified standards across Europe, member states have a degree of leeway when it comes to processing applications. Malta’s approach has led some crypto industry stakeholders to question<\/a> whether the island’s light-touch attitude to its MiCA due diligence is too relaxed<\/a>, and if it is processing applications quicker than it should.<\/p>\n

MiCA’s Malta shortcut<\/h2>\n

Malta introduced a local regulatory framework for crypto in 2018 \u2014 the Virtual Financial Assets (VFA) Framework \u2014 which can be leveraged to allow certain firms to make the transition to MiCA with relative ease. The island\u2019s legacy regime \u201chas been recognised as being quasi-equivalent to MiCAR,\u201d according to the Malta Financial Services Authority (MFSA).<\/p>\n

The framework is an important stepping stone for companies seeking to gain MiCA designation, because if a crypto firm held a local VFA license before Dec. 30, 2024<\/a>, Malta can offer a fast-track to MiCA and so-called \u201cpre-authorization\u201d status.<\/p>\n

\u201cWhile approval timelines can vary based on the completeness and quality of submissions, existing Virtual Financial Asset (VFA) Service Providers may experience expedited processing due to Malta\u2019s established VFA regime,\u201d an MFSA official said via email.<\/p>\n

Oversight concerns<\/h2>\n

While Malta has shown it can adapt quickly to regulatory developments, and it is likely a welcoming development for firms that seek faster regulatory clarity, industry observers have raised questions regarding the substance and scale of its regulatory supervision.<\/p>\n

\u201cSmaller jurisdictions can adapt faster to regulatory developments, and they do,\u201d Liat Shetret, vice president of global policy and regulation at blockchain analytics company Elliptic said in an interview with CoinDesk.<\/p>\n

Shetret’s main concern is whether these fast-tracked approvals are backed by enforcement muscle behind them. \u201cWe have seen a lot of developments around ‘bring the business here.’ Licensing and registration is fast-tracked. And then the rest of it is almost disaggregated in terms of: How do we continue to supervise? What’s the oversight that these entities have? Are our agencies fit for that purpose in terms of size and scale?\u201d<\/p>\n

\u201cI think we just need to move the conversation beyond licensing and registration in jurisdictions like Malta. Show me the enforcement team, show me a skilled crypto enforcement or up-skilled crypto law enforcement team that knows how to investigate,\u201d Shetret said.<\/p>\n

But crypto industry players on the island say that Malta\u2019s familiarity with digital assets regulation is what sets it apart from other places.<\/p>\n

\u201cThese operators are actively seeking regulation by authorities who understand the crypto industry,\u201d Ian Guaci, the managing partner at Malta-based law firm GTG, said in an interview. \u201cThe concern is this: In countries that have never previously regulated crypto-assets, even if they now implement MiCA, who will ensure that the regulation is applied effectively, with the necessary expertise and consistency?\u201d<\/p>\n

In simple terms, it’s like ordering a quick takeout versus going to a Michelin-star restaurant after waiting for three months to get a reservation. This is the point Przemys\u0142aw Kral, the CEO of Zondacrypto, the largest crypto exchange in Poland, is making, regarding the decision to switch his firm\u2019s MiCA focus from Malta to Estonia, despite the latter being more complicated and time-consuming.<\/p>\n

\u201cEstonia is much more exclusive than the Maltese regulatory process,\u201d said Kral, whose firm is a competitor to crypto exchanges on the continent, in an interview, adding that \u201creceiving a MiCA license should not be like ordering food in McDonald’s.”<\/p>\n

“The process should be complicated and should be very strict. If I were a customer, I would choose a company that is applying for a MiCA license that’s a bit more of a complicated procedure, and not with such a fast outcome \u2014 because OKX received it in a few days, frankly speaking.\u201d (OKX received a pre-authorization on Jan. 23, 2025<\/a> and a full license on Jan. 27, 2025<\/a> \u2014 just four days later.)<\/p>\n

Crypto giants’ bet on Malta<\/h2>\n

Among some of the crypto firms that have received the expedited license in Malta is OKX, a top-five exchange known for sponsoring the likes of Manchester City soccer club and the McLaren Formula 1 Team.<\/p>\n

OKX claimed to be the first global player<\/a> granted pre-authorization by the crypto-friendly island in January, having been in possession of a class 4 crypto service provider license in Malta.<\/p>\n

In a turn of events, about a month after OKX trumpeted its MiCA pre-authorization status, the firm paid half a billion dollars to settle charges<\/a> with the U.S. Department of Justice (DoJ), a penalty related to the firm\u2019s alleged history of not holding the appropriate licenses to offer crypto services.<\/p>\n

It’s not clear if Malta had knowledge of the pending settlement with the DoJ, given the sensitivity of the matter. However, in April, MFSA fined OKX $1.2 million <\/a>for breaching the country’s money laundering rules.<\/p>\n

When asked why the MFSA would grant MiCA pre-authorization to a firm that had a pending judgment and settlement with the DoJ, the Maltese watchdog said it takes a risk-based approach.<\/p>\n

\u201cAuthorisations are granted once all information deemed necessary is collected, and on the basis of its careful analysis and cross checks conducted at that juncture. It is important to recognise the need for a balance between comprehensive assessments and processing expediency, essentially focusing on what really matters,\u201d MFSA said via email.<\/p>\n

\u201cMaintaining this balance is key to ensuring that any market entry framework functions effectively. Our approach to assessing risks has been thoughtfully developed over years of supervision and expertise in the various sectors, allowing us to implement measures that are both proportionate and effective,\u201d MFSA added.<\/p>\n

OKX did not provide a comment by publication time.<\/p>\n

However, OKX Europe’s CEO, Erald Ghoos, recently took to X <\/a>to air his views on Malta. “We chose Malta because they had made more advances in their licensed product offering as a whole,” Ghoos said, noting that the firm explored France and Netherlands, before finally deciding on Malta.<\/p>\n

“Did OKX receive any favorable terms from MFSA? The answer is no, and in fact, again the opposite,” he added.<\/p>\n

Similar to OKX, another heavyweight, Crypto.com also announced in January that it had in-principle approval<\/a> from Malta before being granted a CASP license under MiCA.<\/p>\n

Crypto.com, which also courts high profile sponsorships with FIFA World Cup, F1 and PGA golf tours and others, has secured licenses in competitive markets like Dubai, South Korea, Singapore, Australia and even the U.K<\/a>.<\/p>\n

But Crypto.com also has a history of operating without the proper licenses in place. De Nederlandsche Bank, which seeks to sustain financial stability in the Netherlands, fined Crypto.com 2.85 million euros ($3.25 million) in 2023<\/a> for operating in the country without a license for almost two years. It registered with De Nederlandsche Bank as a provider of crypto services<\/a> in 2023.<\/p>\n

A spokesperson for Crypto.com said the firm has a longstanding presence in and commitment to Malta. \u201cWe have maintained a workforce in Malta since the early stages of our existence as a company, and Malta has been the base of our global operations business unit for more than five years,” the spokesperson said via email.<\/p>\n

France fires back<\/h2>\n

Sticking with the restaurant analogy, there are Michelin-star chefs and then there are French cuisine-trained Michelin-star chefs, coveted as one of the most technically challenging feats within the restaurant business.<\/p>\n

Similar dynamics seem to be playing out with the regulatory framework in the continent as well.<\/p>\n

In a speech earlier this year,<\/a> Marie-Anne Barbat-Layani, the president of the financial markets authority in France (AMF), warned of products coming to market via a MiCA passport that were \u201capproved by some of our peers with, let\u2019s say, a rather quick pen.\u201d<\/p>\n

The AMF president called for stronger coordination with the European Securities and Markets Authority (ESMA) to maintain a level playing field.<\/p>\n

\u201cWe want to avoid what’s known as \u2018regulatory shopping,\u2019 that is, actors seeking approval in jurisdictions where it\u2019s easiest to obtain,\u201d Barbat-Layani said.<\/p>\n

MiCA authorization is hammered out through a series of private conversations between commercial firms and their respective regulators, making it difficult to compare and contrast the approaches of various jurisdictions.<\/p>\n

ESMA and the European Banking Authority (EBA) are supposed to drive convergence by setting up structures for peer review and exchange of information. In theory, all member states ought to be aware of how each other is doing this job, and do things in a broadly similar way.<\/p>\n

Daniel Arroche, a partner at French crypto and blockchain-focused law firm d&a partners,<\/a> said that while MiCA seeks harmonization, in practice, standards vary widely. \u201cRegulatory arbitrage\u201d is happening within the EU, Arroche said, which could mislead firms into thinking all licenses are equally solid.<\/p>\n

France has taken the lead by anticipating MiCA with its PACTE law<\/a> and by applying strict vetting, Arroche added.<\/p>\n

\u201cFrance\u2019s regulator, the AMF, has deep experience and is now processing MiCA applications in close alignment with ESMA\u2019s evolving standards,\u201d Arroche said in an email. \u201cIn contrast, countries like Malta or Cyprus have issued licenses before all regulatory technical standards were published \u2014 in some cases even granting \u2018pre-approvals\u2019 not foreseen by MiCA, raising serious concerns about regulatory shortcuts.\u201d<\/p>\n

It\u2019s perhaps not surprising to find some crypto regulation professionals in France calling out Malta\u2019s fast-track approach. France has become known for the glacial pace of its MiCA license authorization; the nation has only awarded one Crypto Asset Service Provider (CASP) license. OKX, for one, was pursuing licenses in both Malta and France but gave up on France <\/a>in July last year.<\/p>\n

In any case, close scrutiny of Malta is reportedly happening behind the scenes. Bloomberg reported in March<\/a> that several EU regulators had urged ESMA to take action concerning OKX in the wake of the hack of crypto exchange Bybit, as well as to press Malta regarding the firm\u2019s license.<\/p>\n

Additionally, Agence France-Presse (AFP), a French international news agency, recently reported<\/a> that ESMA had launched a “peer review” of an unnamed regulator that is potentially too lax.<\/p>\n

An executive at a European CASP, who asked to remain anonymous, told CoinDesk that several sources had indicated to him an ESMA audit on Malta\u2019s financial regulator is taking place.<\/p>\n

Both ESMA and the AMF declined to comment.<\/p>\n

Crypto’s growing pains in the EU<\/h2>\n

While France may not be in favor of how other countries are fast-tracking their regulatory framework, it does raise the question of the risk of centralization and how that spills beyond just crypto-related politics.<\/p>\n

Implementing MiCA at a national level throws a spotlight on how the EU functions as a centralized yet diverse band of trading countries, and raises fundamental questions about the importance of uniformity among Europe’s member states, said Mark Foster, EU Policy Lead, Crypto Council for Innovation.<\/p>\n

\u201cDo you want a federal Europe, essentially, where everything is decided at European level, where there is a certain centralization and a value to that in terms of economies of scale to compete with China or the U.S.?\u201d Foster said in an interview.<\/p>\n

\u201cOn the other hand, a more decentralized approach respects the diversity of each country, some of whom may have specialization in areas like asset management, for instance. That’s obviously very important for those domestic countries and those jurisdictions, who would have a lot to lose if you then just centralize everything and put it all in Paris,\u201d Foster said.<\/p>\n

This is likely creating growing pains within the crypto firms that are craving a clear regulatory framework in the region.<\/p>\n

Firms don\u2019t want to talk openly about ways in which MiCA compliance might vary from one place to the next. But it\u2019s possible to read between the lines in some cases.<\/p>\n

Crypto exchange Bitpanda, which holds MiCA licenses in Austria, Malta and Germany, and also competes against OKX and Crypto.com<\/a>, hinted at how it views MiCA license equivalence when the firm was granted a license by the German regulator, BaFIN.<\/p>\n

\u201cThis licence has immediate validity \u2014 unlike in-principle licenses announced by other crypto platforms which are neither valid nor exist at all,\u201d Bitpanda said of its German license when it was approved in January of this year.<\/a><\/p>\n

Bitpanda declined to comment.<\/p>\n

Cash for citizenship<\/h2>\n

Aside from growing debate over centralization and decentralization, a high profile legal spat with the European Commission (EC) over the island\u2019s right to offer Maltese citizenship to people who invest in the country, recently came to a head.<\/p>\n

Just over a month ago, Malta\u2019s so-called \u201cGolden Visa\u201d or Malta Permanent Residence Programme (MPRP)<\/a> scheme was deemed illegal by Europe\u2019s highest court<\/a>. The program allowed wealthy individuals to gain EU citizenship for a price tag of around $1 million. The EC has said these visas opened Europe\u2019s door to money laundering, tax evasion and corruption.<\/p>\n

\u201cThe same places that tend to implement golden passport programs also offer really accommodating offshore legislation for companies,\u201d according to a former investigator from Tracfin, an anti-money laundering intelligence unit attached to the French Ministry of Finance.<\/p>\n

\u201cThis is no coincidence,\u201d said the person, who asked to remain nameless. \u201cMost of these countries are tax havens and they do these kinds of activities because they don’t have a lot of resources and are struggling to develop their economy.\u201d<\/p>\n

While Malta didn’t appeal the ruling, the country said it is reviewing<\/a> what the court ruling means legally.<\/p>\n

Although the golden visa loophole bears no direct relation to crypto regulation, there could be a parallel in the way that Malta appears to be passporting both wealthy individuals and cash-laden crypto companies into the EU.<\/p>\n

OKX\u2019s Chinese CEO and founder, Star Xu, availed himself of a Maltese passport in March of 2024, according to documents seen by CoinDesk.<\/p>\n

\u201cThe risk for European regulators is that supervisory arbitrage appears to be possible in the region. It’s possible to go to the jurisdiction that offers the biggest promise and the least hassle,\u201d said one anonymous compliance professional who has worked with CASPs attached to multiple member states.<\/p>\n

\u201cIf firms go to Malta to get a license because other jurisdictions are taking too long, I think we have failed to build a system for serious trading firms.\u201d<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Malta, a scenic Mediterranean island with a population of just over half a million, is quickly becoming the preferred European base for high-profile crypto companies like OKX and Crypto.com to come and set up shop. Weeks after Europe\u2019s Markets in Crypto Assets (MiCA) regime came into force last December, Malta awarded licenses to some of […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"iawp_total_views":0,"footnotes":""},"categories":[2],"tags":[3,4,5],"class_list":["post-34337","post","type-post","status-publish","format-standard","hentry","category-news","tag-crypto","tag-doge","tag-news"],"_links":{"self":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/34337","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=34337"}],"version-history":[{"count":0,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/34337\/revisions"}],"wp:attachment":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=34337"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=34337"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=34337"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}