Further to the transitory provision set out in Article 62 Virtual Financial Assets Act 2018 (Chapter 590 of the Laws of Malta), any persons wishing to continue providing virtual financial asset services after the expiry of the transitory period will have to begin to apply for VFA Services Licences in accordance with R3-2.1.2.2 of Chapter 3 of the Virtual Financial Assets Rulebook by 31 October.

In July Malta's all-in-one financial regulator published Consultation Document on Pillar 1 – Regulations, which contains a proposal for a regulatory sandbox, discusses the principle of proportionality and calls for the adoption of RegTech, SupTech and smart regulation.

The application process is to begin with the VFA service provider sending the regulator a letter of intent which sets out:

• comprehensive written description of the proposed structure;
• the virtual financial asset services for which the firm seeks a licence, identifying the people it wants to hold key positions; and
• a legal opinion to the effect that the proposed activity does not fall within the scope of traditional financial services legislation.

Some VFA service providers might not want to register, in which case they will have to cease operations. Each one will have to send the MFSA a note by the deadline, plus a signed declaration from the board that it is not  providing a VFA service in or from Malta any more, along with a signed confirmation that it has no obligations towards its clients in this regard.

Malta passed the VFA Act last year with the aim of attracting firms that purvey distributed ledger technology (DLT).