VIRTUAL FINANCIAL ASSETS [CAP. 590. 1
CHAPTER 590
VIRTUAL FINANCIAL ASSETS ACT
AN ACT to regulate the field of Initi al Virtual Financial Asset Offerings 
and Virtual Financial Assets and to make provision for matters ancillary or 
incidental thereto or connected therewith.
1st November, 2018
ACT XXX of 2018.  as amended by Legal Notice 106 of 2021 .
ARRANGEMENT OF THE ACT
Articles
Part I Preliminary 1 - 2
Part II Initial VFA Offerings 3 - 12
Part III Licensing Requirements 13
Part IV Application, Grant, Cancellation, etc., of 
Li
cences 14 - 22
Part V Board of Administrati on and Obligations of 
Li
cence Holders 23 - 32
Part VI Prevention of Market Abuse 33 - 37
Part VII Regulatory and Investigatory Powers 38 - 49
Part VIII Duty of Auditors 50
Part IX Appeals, Remedies, Sanctions and 
Confidentialit
y 51 - 57
Part X Miscellaneous Provisions 58 - 61
Part XI Transitory Provisions 62
First Schedule Matters to be specified in a 
w
hitepaper of an issuer and 
requirements for its approval and 
publication
Second Schedule VFA services
PART I
Preliminary
Short title. 1. The short title of this Act is the Virtual Financial Assets 
Act.
Interpretation.
Amended by: 
L.N. 106 of 2021. 
Cap. 591.2. (1) Unless the context otherwise requires, terms and 
phrases not defined in this Act shall have the same meaning as the 
s a i d  t e r m s  a n d  p h r a s e s  a r e  g i v e n  i n  t h e  Malta Digital Innovation 
Authority Act .
(2) In this Act and in the Schedules thereto, unless the 
context otherwise requires -
2 [CAP. 590. VIRTUAL FINANCIAL ASSETS
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Cap. 592."administrator" means an officer or any person who is 
appointed to carry out representative and fiduciary functions i n the 
control and administration of a legal person, and any person wh o 
carries out such functions even if under another name, but shal l not 
include a technical administrator or a resident agent under the  
Innovative Technology Arrangements and Services Act  o r  a  V F A  
agent, and the term "board of administration" shall be construe d 
accordingly;
"advertisement" means any form or medium of marketing 
activity disseminated to the public by means of any type of med ia, 
which promotes the purchase of a virtual financial asset or the  
procurement of a VFA service:
Provided that an advertisement shall not include the 
provision of a personal recommendation;
"assets" means movable and imm ovable property of any kind;
"benchmark" means any rate, index or figure, made available 
to the public or published that is periodically or regularly de termined 
by the application of a formula t o, or on the basis of, the val ue of one 
or more underlying assets or prices, including estimated prices , actual 
or estimated interest rates or ot her values, or surveys, and by  
reference to which the amount payable under a virtual financial  asset 
or the value of a virtual fi nancial asset is determined;
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S.L. 373.01"beneficial owner" shall have t he same meaning assigned to it 
under regulation 2 of the Prevention of Money Laundering and 
Funding of Terrorism Regulations , and "beneficial ownership" shall 
be construed accordingly;
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Cap. 204."Central Bank" means the Central Bank of Malta as defined by 
the Central Bank of Malta Act ;
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Cap. 386."company" means a limited liability company constituted in 
Malta in accordance with the Companies Act  or any law which may 
from time to time be in force, or a company incorporated outsid e 
Malta, provided that such company if not incorporated in Malta would qualify to be so incorpora ted under the laws of Malta;
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Cap. 330."competent authority" means the Malta Financial Services 
Authority established by the Malta Financial Services Authority Act ;
"court" means the Civil Court, First Hall;
"decision" includes any direc tive, determination, direction, 
condition, measure, requirement or specification, howsoever described, made by the  competent authority;
"Directive 2015/849/EU" means Directive 2015/849/EU  of the 
European Parliament and of the Council of 20 May 2015 on the 
      
VIRTUAL FINANCIAL ASSETS [CAP. 590. 3
prevention of the use of the financial system for the purposes of 
money laundering or terrorist financing, amending Regulation (EU) 
No 648/2012  of the European Parliament and of the Council, and 
repealing Directive 2005/60/EC  of the European Parliament and of 
the Council and Commission Directive 2006/70/EC , as may be 
amended from time to time;
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Cap. 592."Distributed Ledger Technology" or "DLT" means a database 
system in which information is r ecorded, consensually shared, a nd 
synchronised across a network o f multiple nodes as further desc ribed 
in the First Schedule of the Innovative Technology Arrangements and 
Services Act , whether the same is certified under that Act or 
otherwise;
"DLT asset" means -
(a) a virtual token;
(b) a virtual financial asset;
(c) electronic money; or
(d) a financial instrument,
that is intrinsically dependent on, or utilises, Distributed Le dger 
Technology;
"DLT exchange" means any trading and, or exchange platform 
or facility, whether in Malta or in another jurisdiction, on wh ich any 
form of DLT asset may be transacted in accordance with the rule s of 
the platform or facility;
"document" or "documentation" i ncludes information recorded 
in any form and, in relation to information recorded otherwise than in 
humanly intelligible form, references to its production include  
references to produci ng a copy of the infor mation in legible fo rm;
"EBA" means the European Banking Authority established by 
Regulation (EU) No 1093/2010 ;
"EEA State" means a State which is a contracting party to the 
agreement on the European Economic Area signed in Porto on 2 Ma y 
1992 as amended by the Protocol signed at Brussels on 17 March 1993, and as amended by any subsequent acts;
"EIOPA" means the European Insurance and Occupational 
Pensions Authority established in terms of Article 1 of Regulation 
(EU) No 1094/2010 ;
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Cap. 376."electronic money" shall have t he same meaning assigned to it 
under the Third Schedule to the Financial Institutions Act ;
4 [CAP. 590. VIRTUAL FINANCIAL ASSETS
"ESMA" means the European Securities and Markets 
Authority established by Regulation (EU) No 1095/2010  o f  t h e  
European Parliament and of the Council of 24 November 2010;
"ESRB" means the European Sys temic Risk Board established 
by Regulation (EU) No 1092/2010  of the European Parliament and of 
the Council of 24 November 2010, on European Union macro-prudential oversight of the financial system and establishing a  
European Systemic Risk Board;
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Cap. 330."European regulatory authority" means an authority in a 
Member State or EEA State, other than Malta, which exercises an y 
regulatory or supervisory function in relation to financial ser vices 
corresponding to a function of the competent authority as defin ed in 
the Malta Financial Services Authority Act ;
"European right" means the entitlement of a licence holder to 
establish a branch or provide services in a Member State or an EEA 
State, other than Malta -
(a) in accordance with the Treaty on the Functioning 
of the European Union as applied in that Member State or EEA State; and
(b) subject to any regulations made under this Act, 
or rules issued by the competent authority pursuant to this Act ;
"European Supervisory Authorities" or "ESAs" means EBA, 
ESMA and EIOPA;
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Cap. 370."financial instrument" shall have the same meaning assigned to 
it under the Second Schedule to the Investment Services Ac t, whether 
or not issued in Malta;
"funds" means banknotes and coins, scriptural money, 
electronic money and virt ual financial assets;
"initial virtual financial as set offering" or "initial VFA 
offering" means a method of raising funds whereby an issuer is issuing virtual financial assets and is offering them in exchan ge for 
funds;
"inspector" means an inspector  appointed under article 40;
"issuer" means a legal person duly formed under any law for 
the time being in force in Malta which issues or proposes to is sue 
virtual financial assets i n or from within Malta;
"licence" means a licence to provide a VFA service or services 
granted by the competent autho rity in terms of article 15;
"licence holder" means a person who holds a licence under this 
      
VIRTUAL FINANCIAL ASSETS [CAP. 590. 5
Act;
"Malta’s international commitments" means Malta’s 
commitments, responsibilities and obligations arising out of membership of, or affiliation to, or relationship with, any international, global or regional organisations or grouping of countries or out of any treaty, convention or other internation al 
agreement, however called, whe ther bilateral or multilateral, t o which 
Malta is a party;
"market abuse" means insider dealing, the unlawful disclosure 
of inside information and market manipulation in relation to an y 
transaction, order or behaviour  concerning any virtual financia l asset;
"Member State" means a Member State of the European 
Union;
"MiFID" means Directive 2014/65/EU  of the European 
Parliament and of the Council of 15 May 2014, on markets in financial instruments and amending 
Directive 2002/92/EC  and 
Directive 2011/61/EU , as amended from time to time, and includes 
any implementing measures that have been or may be issued thereunder;
"Minister" means the Minister re sponsible for the regulation of  
financial services;
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Cap. 330."overseas regulatory authority" means an authority in a 
country or territory outside Malta  that is not a Member State o r EEA 
State which exercises any regulatory or supervisory function in  
relation to financial services corresponding to a function of t he 
competent authority as defined in the Malta Financial Services 
Authority Act ;
"person" means a natural or legal person in terms of law;
"prescribed" means prescribed by  regulations made under this 
Act;
"qualifying holding" means a direct or indirect holding in a 
legal person which represents ten  p e r  c e n t  ( 1 0 % )  o r  m o r e  o f  t h e  
capital or of the voting rights in such person which makes it p ossible 
to exercise a significant influe nce on the administration of th e person 
in which that holding subsists a nd includes the holding of DLT assets 
with voting, control or ownership rights, and "qualifying holde r" 
shall be construed accordingly;
"recognised jurisdiction" mea n s  a  m e m b e r  o f  t h e  E u r o p e a n  
Union or the EEA or the Organisation for Economic Co-operation and Development as well as any other jurisdiction approved by n otice 
of the Minister from time to time f or the purpose of this defin ition;
6 [CAP. 590. VIRTUAL FINANCIAL ASSETS
"resident in Malta" means an individual whose habitual 
residence is in Malta;
"rules" refers to rules issued by the competent authority in 
terms of this Act;
"smart contract" means a form of technology arrangement 
consisting of -
(a) a computer protocol; or 
(b) an agreement concluded wholly or partly in an 
electronic form, which is aut omatable and enforceable by 
computer code, although some parts may require human input and control and which may be a lso enforceable by ordinary 
legal methods or by a mixture of both;
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S.L. 373.01."subject person" shall have the same meaning assigned to it 
under regulation 2 of the Prevention of  Money Laundering and 
Funding of Terrorism Regulations ;
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Cap. 386."subsidiary" has the same meaning assigned to it under article 
2 of the Companies Act ;
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Cap. 330."Tribunal" means the Financial Services Tribunal established 
under article 21 of the Malta Financial Services Authority Act ;
"unit" means any representation of the rights and interests in a 
legal person and "unit holder" shall be construed accordingly;
"VFA agent" means a person registered with the competent 
authority under this Act and aut horised to carry on the profess ion of:
(a) advocate, accountant or auditor; or
(b) a firm of advocates, accountants or auditors, or 
corporate services providers; or
(c) a legal organisation which is wholly owned and 
controlled by persons referred to in paragraphs (a) or (b),
whether in Malta or in another re cognised jurisdiction, or any other 
class of persons holding authorisations, qualifications and, or  
experience deemed by the competent authority as possessing suit able 
expertise to exercise the functio ns listed under articles 7 and , or 14;
"VFA agreement" means any agreement the making or 
performance of which, by either party, constitutes a service or  
activity licensable under this Act;
"VFA exchange" means a DLT exchange for virtual financial 
assets, operating in or from with in Malta, within which multipl e third 
      
VIRTUAL FINANCIAL ASSETS [CAP. 590. 7
party buying and selling interests for virtual financial assets  can 
interact in a manner that resu lts in a contract, by exchanging one 
virtual financial asset for another or a virtual financial asse t for fiat 
currency that is legal tender or  a fiat currency that is legal tender for a 
virtual financial asset;
"VFA exchange operator" means a person or persons who 
manages and, or operates the busi ness of a VFA exchange and may  be 
the VFA exchange itself;
"VFA service" means any serv ice falling within the Second 
Schedule when provided in relation to a DLT asset which has bee n 
determined to be a virtual financial asset;
"virtual financial asset" or "VFA" means any form of digital 
medium recordation that is used as a digital medium of exchange , 
unit of account, or store of value and that is not -
(a) electronic money;
(b) a financial instrument; or 
(c) a virtual token;
"virtual token" means a form of digital medium recordation 
whose utility, value or application is restricted solely to the  
acquisition of goods or services, either solely within the DLT platform on or in relation to which it was issued or within a l imited 
network of DLT platforms:
Provided that the term ''DLT pla tform'' referred to in this 
definition shall exclude DLT exchanges:
Provided further that a virtual token which is or may be 
converted into another DLT asset type shall be tr eated as the D LT asset 
type into which it is or may be converted;
"whitepaper" means a document in such form and containing 
such information as specified i n article 4 and th e First Schedu le.
( 3 ) A n y  r e f e r e n c e  i n  t h i s  A c t  t o  a n y  l a w ,  o r  p r o v i s i o n  
thereof, shall be construed as a reference to that law or provi sion as 
from time to time in force, and shall include a reference to an y 
enactment replacing such law or provision, and to any subsidiar y 
legislation made thereunder.
(4) In this Act and in any regulations made thereunder, if 
there is any conflict between th e English and Maltese text, the  
English text shall prevail.
8 [CAP. 590. VIRTUAL FINANCIAL ASSETS
PART II
Initial VFA Offerings
Initial VFA 
offerings and 
admission to 
trading on VFA exchange to be 
made with a 
registered whitepaper.3. (1) No issuer shall offer a virtual financial asset to 
the public in or from within Malta or shall apply for a virtual  
financial asset’s admission to trading on a DLT exchange unless  such 
issuer draws up a whitepaper which -
(a) complies with the requi rements of article 4; and
(b) is registered in accordance with sub-article (2):
Provided that where a DLT asset is determined by both 
the issuer and its VF A agent, as appointed by the issuer in ter ms of 
article 7(1)(b) to be a financial instrument or electronic mone y, the 
issuer shall be required to compl y with the respective applicab le laws 
in lieu of the provisions of this Act.
(2) No whitepaper shall be issued or published in terms of 
article 9(2) unless, ten working days before the date of its ci rculation in 
any way whatsoever, a copy there of, signed by every person name d 
therein as a member of the issuer’s board of administration or their 
agent authorised in writing has b een delivered to the competent  
authority .
(3) The VFA agent appointed in terms of article 7 shall 
confirm to the competent authority that the whitepaper complies  with 
this article and article 4 and shall state any assumptions it h as made and 
any reservations it may have on any matter relating to the whit epaper 
for the consideration of the competent authority.
(4) Upon being satisfied that the requirements of article 4(1) 
have been complied with, the competent authority shall register  the 
whitepaper.
Dating of 
whitepaper and matters to be stated 
therein.4. (1) Every whitepaper shall -
(a) be dated;
(b) state the matters specified in the First Schedule; 
and
(c) include a statement by the board of 
administration confirming that the whitepaper complies with the requirements of article  3 and of this article.
(2) A condition requiring or binding an investor in an initial 
VFA offering to waive compliance with any requirement of this article or purporting to affect th e investor with notice of any  contract, 
      
VIRTUAL FINANCIAL ASSETS [CAP. 590. 9
document or matter not specifically referred to in the whitepap er 
shall be void.
Website. 5. Where the issuer maintains a website, its homepage shall 
at least contain such information and in such format as may be required by the competent authority by means of rules issued un der 
this Act.
Advertisements. 6. (1) Any type of advertisements relating to either an 
initial VFA offering or the admission of a virtual financial as set to 
trading on a VFA exchange shall satisfy the following requireme nts:
(a) advertisements shall be clearly identifiable as 
such. The information contained in the advertisement shall not 
be inaccurate or misleading. This information shall also be consistent with the information c ontained in the whitepaper, if  
already published in terms of article 9(2), or with the information required to be in the whitepaper, if the whitepaper  
is to be published afterwards;
(b) an advertisement shall contain a statement that a 
whitepaper has been or will be published in terms of article 9(2) and the addresses and times at which copies of the whitepaper are or will be available to the public; and
(c) all information concerning the initial VFA 
offering or the admission to trading on a VFA exchange disclosed in an oral or written fo rm, even if not for advertisi ng 
purposes, shall be consistent with that contained in the whitepaper:
Provided that the term "information" shall be deemed for 
the purposes of this article to include the name of any person endorsing the issuer’s whitepaper:
Provided further that where a person under this sub-article 
is an issuer within the meaning of this Act, the reference to " VFA 
exchange" shall be read as a reference to "DLT exchange".
(2) Such information shall be included in the whitepaper or 
in a supplement thereto in accor dance with the First Schedule.
Requirement for 
appointment of 
VFA agent and obligations 
towards the 
competent authority.7. (1) An issuer is required to appoint, and have at all 
times in place, a VFA agent who shall be registered with the competent authority under this Act and shall:
(a) advise and guide the issuer as to its 
responsibilities and obligations to ensure compliance with the provisions of this Act and of any rules or regulations issued thereunder;
(b) receive and retain all documentation and 
10 [CAP. 590. VIRTUAL FINANCIAL ASSETS
information to demonstrate how, and to what extent, the issuer 
has, in the VFA agent’s opinion, satisfied the requirements as prescribed in the provisions of this Act and of any rules or regulations issued thereunder, in so far as they apply to any o ffer 
or admission to trading referred to in article 3, including inter 
alia how the issuer is considered to be a fit and proper person to 
carry out the activity or activities referred to in article 3, and to 
demonstrate how the issuer has c omplied and, as far as it can 
determine, will comply with its continuing obligations under this Act;
(c) advise and guide the issuer as to its 
responsibilities and obligations to ensure compliance with the provisions of this Act and of any rules or regulations issued thereunder;
(d) advise and guide the issuer on all matters 
relating to the admission of the i ssuer’s virtual financial ass ets 
to trading on a DLT exchange in terms of article 8, and their ongoing trading thereon, and submit all documentation and information in relation thereto;
(e) submit to the competent authority all required 
information and documentation in  terms of this Act and of any 
regulations made or rules issued thereunder, including the confirmations in terms of artic le 4(1), in a timely manner;
(f) disclose to the competent authority without 
delay any information or explanations that the competent authority may reasonably require for the purpose of verifying any information which should be taken into account in considering an application for registration of a whitepaper;
(g) not be an employee or otherwise engaged with the 
issuer in a manner which pro hibits him from exercising 
independent professional judgement and for the avoidance of doubt, persons connected to the VFA agent shall not be considered as prohibited from exercising independent professional judgement only because other persons in the same organization or activity, including their partners or employees , 
have been simultaneously engaged to provide legal advice or financial or consultancy or acco unting or administrative suppor t 
services to an issuer
;
(h) 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 asse ts on a DLT exchange;
(i) advise the competent authority in writing 
without delay of its resignation, its intention to surrender it s 
      
VIRTUAL FINANCIAL ASSETS [CAP. 590. 11
registration or if its appointment is terminated giving details  of 
any relevant facts or circumst ances thereto. A copy of such 
notification shall also be sent to the issuer;
(j) review and submit to the competent authority on 
behalf of the administrators of an issuer on an annual basis a certificate of complia nce within the meaning of article 32;
(k) be considered as a subject person; and
(l) comply with any other conditions as the 
competent authority may requi re or as may be prescribed.
(2) In discharging its obligations under sub-article (1), a 
VFA agent shall:
(a) deal with the competent  authority in an open and 
co-operative manner;
(b) deal promptly with all enquiries raised by the 
competent authority; and
(c) disclose to the competent authority in a timely 
manner any material information relating to itself or the issue r 
of which it has knowledge which addresses non-compliance with any of the provisions of this Act or of any regulations made or rules issued thereunder.
(3) The competent authority shall establish a public register 
of all registered VFA agents, which shall be publicly available  f o r  
consultation, shall be accessibl e online and shall be updated o n a 
regular basis.
(4) Articles 13, 14(1) and (2), 15(1), (2)(a), (3) and (5) to 
(8), 17 to 28 and 31 shall apply to VFA agents mutatis mutandis  and 
to such extent as may be specified in the regulations made or r ules 
issued under this Act:
Provided that article 53 shall be applicable only in 
relation to articles 13, 25(1), 26 and 28 mentioned in this sub -article.
(5) Where the applicant is constituted in a recognised 
jurisdiction, he shall abide with any local presence requiremen ts as 
may be specified in the regulations made or rules issued under this Act.
Admission of 
virtual financial 
assets to trading.8. (1) A person may apply for admission of its virtual 
financial assets to trading on a VFA exchange in accordance wit h the 
provisions of any regulations mad e or rules issued under this A ct:
Provided that an application in terms of this sub-article 
shall be made only th rough a VFA agent:
12 [CAP. 590. VIRTUAL FINANCIAL ASSETS
Provided further that where a person under this sub-
article is an issuer within the meaning found under this Act, t he 
reference to "VFA exchange" sha ll be read as a reference to "DL T 
exchange".
(2) Where, further to an application made under sub-article 
(1), an issuer’s virtual financial assets are admitted to tradi ng, the 
issuer shall comply with all the applicable requirements as pre scribed 
in this Act and any regulations made and rules issued thereunde r for 
as long as such virtual financia l assets remain admitted to tra ding:
Provided that the provisions of article 3(1) and of this 
sub-article shall not apply in so far as the said virtual finan cial assets 
have been admitted to trading irre spective of the issuer’s will .
Applicable 
principles.9. (1) An issuer shall:
(a) conduct its business with  honesty and integrity;
(b) communicate with his investors in a fair, clear 
and not misleading manner;
(c) conduct its business with due skill, care and 
diligence;
(d) identify and manage any conflict of interest that 
may arise;
(e) have effective arrangements in place for the 
protection of investors’ funds;
(f) have effective administration arrangements;
(g) maintain all of its systems and security access 
protocols to appropriate i nternational standards; and
(h) be considered as a subject person.
(2) Where an issuer maintains a website in terms of article 5 
and is required to make public any information or provide notic e to 
the public, the issuer shall be considered to have complied wit h this 
obligation if it publishes such i nformation or notice on his we bsite.
Civil liability for 
misstatements in whitepaper, 
advertisements and 
website.10. (1) The issuer shall be liable for damages sustained 
by a person as a direct consequen ce of such person having bough t 
virtual financial assets, either as part of an initial VFA offe ring by 
such issuer or on a DLT exchange, on the basis of information contained in the whitepaper, web site or advertisement by reason  of 
any untrue statement included therein:
Provided that a statement included in a whitepaper, 
website or advertisement shall be deemed to be untrue if it is 
      
VIRTUAL FINANCIAL ASSETS [CAP. 590. 13
misleading or otherwise inaccurate or inconsistent, either wilf ully or 
in consequence of gross negligence, in the form and context in which 
it is included:
Provided further that a statement shall be deemed to be 
included in a whitepaper if it is contained therein or in any d ocument 
or information referred to th erein or issued therewith.
(2) No person shall be liabl e under this article if -
(a) he proves that he believed and had reasonable 
grounds to believe, that the  statement was true; or
(b) on becoming aware of the untrue statement, he 
immediately gave reasonable public notice in terms of article 9(2) of the untruthfulness of the statement.
(3) No person shall be liable for statements made in the 
summary referred to in the First Schedule, including the transl ation 
thereof, except when such statements are misleading, inaccurate  o r  
inconsistent, when read together with the other parts of the whitepaper, or if it does not provide, when read together with the 
other parts of the whitepaper, key information in order to aid investors when considering whether to invest in such virtual fi nancial 
assets. The summary shall contai n a clear warning to that effec t.
Cross-border offers 
and admission to trading.11. The offering of virtual financial assets, or the admission 
to trading on a DLT exchange, in a country outside Malta shall be 
subject to the laws of that country.
Powers of the 
competent 
authority.12. (1) Without prejudice to any other powers of the 
competent authority under other provisions of the Act, the comp etent 
authority shall also have the power to:
(a) require the inclusion in the whitepaper, 
advertisements or the issuer’s website, as applicable, of supplementary information necessary for investor protection as the competent authority may specify;
(b) require the amendment in the whitepaper, 
advertisements or the issuer’s website, as applicable, of any information necessary for investor protection as the competent 
authority may specify;
(c) suspend an initial VFA of fering or the trading on 
a VFA exchange or prohibit or suspend advertisements if the competent authority, in its reaso nable discretion, believes or 
suspects that a provision of this Act has been infringed;
(d) prohibit an initial VFA offering or trading on a 
VFA exchange if the provisions of this Act have been infringed or if the competent authority, in its reasonable 
14 [CAP. 590. VIRTUAL FINANCIAL ASSETS
discretion, believes or suspects that they have been or could b e 
infringed; and
(e) make public the fact that an issuer is failing to 
comply with his obligations under any provision of the Act and may disclose measures or  sanctions imposed on any 
person responsible for the issue,  circulation or distribution o f a 
whitepaper, unless such disclosure would cause disproportionate damage to the persons involved.
(2) Where a person under sub-article (1) is an issuer within 
the meaning found under this Act, the reference to "VFA exchang e" 
shall be read as a reference to "DLT exchange".
PART III
Licensing Requirements
Licensing and 
determination 
requirement.13. (1) No person shall provide, or hold itself out as 
providing, a VFA service in or from within Malta unless such pe rson 
is in possession of a valid licence granted under this Act by t he 
competent authority:
Provided that, in so far as a determination has not 
already been made in terms of article 3, a person under this su b-
article shall make a determination as to whether a DLT asset in  
relation to which it provides, or holds itself out as providing , a VFA 
service falls within the meaning of a virtual financial asset.
(2) The competent authority may  by notice in writing to any 
person determine that -
(a) an activity constitutes a VFA service; or
(b) a DLT asset qualifies as a virtual financial asset, 
a virtual token, electronic money or a financial instrument, an d 
whether or not iss ued in Malta; or
(c) a VFA service is provided in or from within 
Malta; or
(d) an initial VFA offering has been/is being made 
in or from within Malta:
Provided that the competent authority’s determination 
shall be subject to any appe al in terms of article 51.
PART IV
Application, Grant, Cance llation etc. of Licences
Application for a 
licence.14. (1) An application for a licence under this Act shall 
      
VIRTUAL FINANCIAL ASSETS [CAP. 590. 15
be made solely through a VFA agent which is duly registered in terms 
of this Act in the form and manner required by the competent authority and shall furthermore -
(a) contain or be accompanied by such information 
and documentation, in addition to those required by this article, as the competent authority may require or as may be 
prescribed;
(b) be verified in the manner and to the extent 
required by the competent author ity, or as may be prescribed;
(c) contain the address in Malta for service on the 
applicant of any notice or other document required or authorised to be served on it by or under this Act;
(d) be accompanied by a programme of operations 
setting out the systems, security access protocols and any othe r 
matters as may be required to be set out by the competent authority from time to time; and
(e) be accompanied by such fee as may be 
prescribed in respect of the licence applied for, which fee sha ll 
not be refundable. 
(2) An application for a licence under this Act may only be 
withdrawn by written notice to the competent authority at a tim e 
before it has been g ranted or refused.
(3) The VFA agent shall be requi red, diligently and with 
utmost good faith, to submit full and correct information whene ver it is 
required to do so, to support the competent authority in carryi ng out its 
reviews to establish that the applicant is a fit and proper person to 
provide the VFA services concerned and will comply with and observe the requirements of this Act and any regulations made a nd 
rules issued thereunder and which are applicable to it:
Provided that article 7 shall apply to VFA agents 
appointed in terms of this article mutatis mutandis .
Where the 
competent 
authority may 
grant or refuse to grant a licence.15. (1) The competent authority may grant or refuse to 
grant a licence applie d for under this Act:
Provided that the competent authority shall only grant a 
licence upon being satisfied that the conditions laid down in t his 
article have been met and such licence may be general or may be  
restricted to particular specified VFA services.
(2) The conditions referred to in sub-article (1) shall consist 
of the following and shall be s atisfied on an ongoing basis:
(a) the applicant is a fit and proper person to provide 
16 [CAP. 590. VIRTUAL FINANCIAL ASSETS
the VFA services concerned and that the applicant will comply 
with and observe the require ments of this Act and any 
regulations made and rules issued thereunder and which are applicable to it;
( b ) w h e r e  t h e  a p p l i c a n t  i s  a  n a t u r a l  p e r s o n ,  s u c h  
person is resident in Malta;
(c) where the applicant is a legal person:
(i) it is constituted either in Malta, in 
accordance with the laws of Malta, or in a recognised jurisdiction:
Provided that where the applicant is 
constituted in a recognised jurisdiction, it shall abide with any local presence requirements 
prescribed or as 
may be prescribed; and
(ii) its purposes or objects are limited to acting 
as a licence holder and carrying on activities ancillary or incidental thereto, and do not include purposes or objects which are not compatible with the VFA services of a licence holder.
For the purposes of this sub-paragraph, a 
purpose or object referring to any activity that requires any kind of authorisation whatsoever by the competent authority under any Maltese law, other than this Act, shall be deemed to be incompatible with the VFA services of a licence holder:
Provided that where a licence holder 
proposes to engage in busi ness activities which are 
not listed in the Second Schedule and are not compatible within the meaning of this sub-paragraph, the licence holder shall be required to establish a separate entity; and
(iii) its actual activities are compatible and 
connected with the VFA servi ces of a licence holder.
(3) (a) In granting a licence the competent authority 
may subject it to such conditions as it may deem appropriate an d 
having granted a licence it may, from time to time, vary or rev oke any 
condition so imposed or impose new conditions.
(b) For the better carrying out of the provisions of 
this Act, the competent authority may, from time to time, issue  and 
publish rules which shall be binding on licence holders and oth ers as 
may be specified therein. Such  rules may lay down additional 
      
VIRTUAL FINANCIAL ASSETS [CAP. 590. 17
requirements, conditions and, or exemptions in relation to acti vities 
of licence holders and any other matters as the competent autho rity 
may consider appropriate:
Provided that different rules may be issued by the 
competent authority with respect to different classes or catego ries of 
applications.
(4) Without prejudice to the generality of sub-articles (1) 
and (2), where a VFA exchange is managed or operated by a VFA exchange operator other than the  VFA exchange itself, the compe tent 
authority shall establish by means of rules how the different obligations are to be allocated between the VFA exchange and th e 
VFA exchange operator.
(5) When considering whether to grant or refuse to grant a 
licence the competent authority s hall, in particul ar, have rega rd to -
(a) the protection of investors and the general 
public;
(b) the protection of the reputation of Malta taking 
into account Malta’s international commitments;
(c) the promotion of innovation, competition and 
choice; and
(d) the reputation and suitability of the applicant and 
all other parties conne cted with the applicant.
(6) Every licence shall specify the VFA service or services 
which the holder thereof has been licensed to provide and shall  state 
the date on which it shall take effect.
(7) Without prejudice to the generality of sub-article (2), the 
conditions to which the competent authority shall subject a lic ence 
may be made applicable, or be pr escribed to be applicable, to -
(a) all licences;
(b) certain categories of licences;
(c) all licences granted to certain categories of 
licence holders;
(d) all licences in relation to particular VFA 
services.
(8) Any requirement in this Act that a person be a fit and 
proper person to carry out certa in activities or functions shal l be 
interpreted as a requirement not only that such person be a fit  a n d  
proper person to carry out such activities or functions, but al so that 
18 [CAP. 590. VIRTUAL FINANCIAL ASSETS
any beneficial owner, qualifying holder, member of the board of  
administration and any other person who will effectively direct  the  
business of the licence holder be a fit and proper person to ca rry out 
such activities or functions.
(9) Where a licence holder proposes to engage in business 
activities not listed in the Second  Schedule but compatible wit hin the 
meaning of sub-article (2)(c)(ii), the competent authority may require 
the establishment of a separate entity, where the proposed acti vities 
may in the opinion of the competent authority impair or threate n to 
impair either the financial soundness of the licence holder or the 
ability of the competent authority to monitor the licence holde r’s 
compliance with all the obligations laid down in this Act or an y 
regulations and rules issued thereunder.
Register of licence 
holders.16. (1) The competent authority shall establish a public 
register of all licence holders. This register shall also indic ate the 
VFA services in relation to w hich each licence was issued.
(2) Such register shall be publicly available for 
consultation, shall be accessibl e online and shall be updated o n a 
regular basis.
Where the 
competent authority shall 
refuse to grant a 
licence.17. The competent authority shall refuse to grant a licence 
under this Act in any of t he following instances:
(a) if the application is not submitted in accordance 
with the established form or in accordance with applicable procedure; or
(b) if the applicable fees have not been paid; or
(c) if the competent authority, in its reasonable 
discretion, is not satisfied that the applicant and all relevan t 
persons mentioned in article 1 5(8) are fit and proper; or
(d) if it transpires that any information or 
submission made to the competent authority is materially false, misleading, inacc urate or incomplete; or
(e) if the competent authority, in its reasonable 
discretion, is not satisfied that -
(i) the applicant has sound and prudent 
management, robust administration arrangements and adequate internal contro l or security mechanisms:
Provided that such arrangements, 
procedures and mechanisms shall be comprehensive and proportionate to the nature, scale and complexity of the VFA services to be provided by the applicant; or
      
VIRTUAL FINANCIAL ASSETS [CAP. 590. 19
(ii) where there are close links between the 
applicant and another person or persons, such links will not through any law, regulation, administrative provision or in any other manner prevent it from exercising effective supervision of that applicant under the provisions of this Act or any rule:
Provided that the competent authority may 
from time to time, by means of rules issued under this Act define the circumstan ces in which "close links" 
are to be regarded as existing between any two or more persons; or
(iii) the applicant will comply with all 
regulatory requirements applicable to licence holders of the relevant category, including those listed in article 23, and with any additional requirements that the competent authority considers necessary; or
(iv) that the VFA service or services being 
proposed is compliant with any law, regulations or rules in force; or
(f) if the competent authority, in its reasonable 
discretion, believes that granting a licence to the applicant m ay 
pose a risk to investors, the general public, the reputation of  
Malta or the promotion of inn ovation, competition and choice; 
or
(g) if sufficient information as requested by the 
competent authority has not been provided.
Burden of proof. 18. The burden of proving -
(a) the person’s qualification to hold a licence or to 
continue holding a licence; and, or
(b) the determination in terms of the proviso to 
article 13(1),
shall rest at all times on the applicant or the licence holder,  as  the 
case may be.
Revocable 
privilege.19. The granting of a licence is a concession and a revocable 
privilege, and no holder thereof shall be deemed to have acquir ed any 
vested rights therein or thereunder.
Assignment and 
transferability.20. A licence granted by the competent authority under this 
Act or a qualifying holding or beneficial ownership in a licenc e 
holder may not be assigned or transferred in any way whatsoever  to 
any other person without the pri or written consent of the compe tent 
authority, and any such assignment or transfer to any other per son 
20 [CAP. 590. VIRTUAL FINANCIAL ASSETS
without the competent authority’s consent shall be considered n ull 
and void and constitute sufficient grounds for the competent au thority 
to cancel that licence.
Power of 
competent authority to cancel 
or suspend 
licences.21. (1) The competent authority may at any time cancel 
or suspend a licence in accordan ce with the provisions of this Act.
(2) Without prejudice to the generality of sub-article (1), the 
competent authority may can cel or suspend a licence -
(a) if it considers that the holder thereof is not a fit 
and proper person to provide the  VFA service he is authorised 
to provide; or
(b) if it considers that the holder thereof does not 
fulfil the requirements of, or has contravened, any of the provisions of this Act or of any regulations made or rules issued thereunder, or has failed to satisfy or comply with any obligation or condition to which h e or the licence is subject b y 
virtue of or under this Act; or
(c) if the competent authority has been furnished by 
or on behalf of the licence holder with information which is false, inaccurate or misleading,  or if the licence holder has 
obtained the licence by making false statements or by any other irregular means; or
(d) if the licence holder has not commenced to 
provide the VFA service he has been authorised to provide within twelve months from the date of issue of the licence or has ceased to provide such VFA service; or
(e) if it considers it desirable to cancel or suspend 
the licence for the protection of investors and the general public, and the reputation of Ma lta taking into account Malta’s  
international commitments; or
(f) at the request of the licence holder; or
(g) if the licence holder is  declared bankrupt or goes 
into liquidation or makes a composition with its creditors or i s 
otherwise dissolved; or
(h) if the licence holder has ceased to operate as a 
result of a merger with a nother licence holder; or
(i) in any of the circumstances under which the 
competent authority would have been precluded from issuing the licence under this Act or where under this Act it would have been entitled to refuse th e grant of such licence; or
(j) after proper communicatio n and investigation, at 
      
VIRTUAL FINANCIAL ASSETS [CAP. 590. 21
the written request of another competent regulatory authority 
which is carrying regulatory functions in relation to the relevant licence holder.
(3) The competent authority, where so required, shall notify 
the appropriate ESA and any other competent regulatory authorit y 
which is carrying out regulatory functions in relation to the r elevant 
licence holder of any cancellation of a licence in terms of sub -article 
(1). 
Notification of 
proposed refusal, 
variation, 
cancellation or suspension of a 
licence.22. (1) Where the competent authority proposes -
(a) to vary any condition to which the licence is 
subject or to impose a condition thereon; or
(b) to refuse an application for a licence or to cancel 
or suspend a licence,
it shall give the applicant or the licence holder, as the case may be, 
notice in writing of its intention to do so, setting out the re asons for 
the decision it proposes to take. 
(2) Every notice given under sub-article (1) shall state that 
the recipient of the notice may, within such reasonable period after 
the service thereof as may be stated in the notice, make representations in writing to the competent authority giving re asons 
why the proposed decision should not be taken, and the competen t 
authority shall consider any rep resentation so made before arri ving at 
a final decision.
(3) The competent authority shall as soon as practicable 
notify its final decision in writing to any of the persons to w hom 
notice is to be given under sub-article (1).
PART V
Board of Administration and Ob ligations of Licence Holders
Applicable 
requirements and 
compliance with the Prevention of 
Money Laundering 
Act.23. (1) Licence holders shall comply with and observe 
any applicable regulations made and rules issued under this Act , 
including with reference to prudential requirements, and shall be 
considered as subject persons.
For the purposes of this sub-article, the term "prudential 
requirements" shall include re quirements on administration, 
compliance, risk management, sys tems and security access protoc ols, 
financial resources, capital ad equacy, professional indemnity 
insurance and any other relate d requirements included in the 
regulations made or rules  issued under this Act.
(2) Without prejudice to the generality of sub-article (1), a 
licence holder shall ensure that all of its systems and securit y access 
22 [CAP. 590. VIRTUAL FINANCIAL ASSETS
protocols are maintained at all times to appropriate high stand ards.
Board of 
administration.24. (1) The licence holder shall ensure that -
(a) members of its board of administration shall at 
all times be of sufficient good repute, possess sufficient collective knowledge, skills and experience and commit sufficient time to perform their duties and be able to understand the licence holder’s activities, including the main risks. In this regard, the licence holder shall devote adequate  
human and financial resources to the induction and training of members of its board of administration;
(b) the number of positions as administrator which 
may be held by a member of its board of administration at the same time shall take into account individual circumstances and the nature, scale and complexity of the licence holder’s activities; and
(c) each member of its board of administration shall 
act with honesty, integrity and independence of mind to effectively assess and challenge  t h e  d e c i s i o n s  o f  t h e  s e n i o r  
management where necessary and to effectively oversee and monitor management decision-making.
(2) The board of administration of the licence holder, or the 
licence holder itself in the case of an individual, shall be ve sted with 
the responsibility to abide by all requirements under this Act and any 
regulations made and ru les issued thereunder:
Provided that the board of administration or the licence 
holder itself, as applicable, shall not be held responsible whe n they 
prove that they have acted in good faith pursuant to their fidu ciary 
obligations and in terms of applicable legislation.
Changes of 
information.25. (1) The licence holder shall provide the competent 
authority with particulars in writing of any changes in the information provided under this Act as soon as such licence hol der 
becomes aware of such changes and shall notify the competent authority, on a continuous basis, of any changes or circumstanc es 
which give rise to the existence  of close links within the mean ing in 
article 17(e).
(2) Notwithstanding the generality of sub-article (1), any 
substitutions or amendments which refer to upgrades, maintenanc e, 
innovative evolution or mere replacement of operating systems s hall 
be notified to the competent authority where they have, or have  the 
potential to have, a material impact on investors or they are n ot in any 
manner in accordance with a ny provision of this Act:
Provided that the competent authority may issue rules in 
      
VIRTUAL FINANCIAL ASSETS [CAP. 590. 23
terms of article 15(3)(b) in order to prescribe mandatory notif ication 
in general or provide guide lines in particular cases. 
Payment of fees. 26. Every licence holder shall pay to the competent 
authority such periodic fee, and within such time, as may from time 
to time be prescribed.
Fiduciary 
obligations.27. (1) Licence holders shall act honestly, fairly and 
professionally and shall comply with the requirements laid down  in 
this Act and any regulations made and rules issued thereunder, as 
well as with other legal and regulatory requirements as may be applicable.

Cap. 16.(2) A licence holder shall be subj ect to fiduciary obligations 
as established in the  Civil Code , in so far as applicable.
Participation in a 
licence holder, 
mergers, reconstructions, 
divisions and 
changes in capital or voting rights.28. (1) Notwithstanding anything contained in any other 
law, the consent of the competent authority given in writing sh all be 
required before a person may lawfully -
(a) acquire, directly or indirectly, a qualifying 
holding in a licence holder;
(b) increase, directly or indirectly, an existing 
holding which is not a qualifying holding so as to cause it to become a qualifying holdi ng in a licence holder;
(c) further increase, directly or indirectly, such 
qualifying holding in a licence holder as a result of which the  
proportion of the voting rights or of the capital held would reach or exceed twenty per cent (20%), thirty per cent (30%) or fifty per cent (50%) or so, so that the licence holder, wher e a 
company, would become its subsidiary;
(d) dispose, directly or indirectly, of a qualifying 
holding in a licence holder;
(e) reduce, directly or indirectly, a qualifying 
holding so as to cause  it to cease to be a qualifying holding; or
(f) reduce, directly or indirectly, a qualifying 
holding so that the proportion of the voting rights or of the capital held would fall below twen ty per cent (20%), thirty per  
cent (30%) or fifty per cent (50%) or so, so that the licence holder, where a company, woul d cease to be its subsidiary.
(2) Without prejudice to the othe r provisions of this Act and 
notwithstanding anything contained in any other law, and withou t 
prejudice to sub-article (1), the consent of the competent auth ority 
given in writing shall be required before a licence holder may 
24 [CAP. 590. VIRTUAL FINANCIAL ASSETS
lawfully -
(a) sell or dispose of its business or any significant 
part thereof;
(b) merge with any other company, whether licensed 
under this Act or not:
Provided that for the purpo ses of this sub-article, 
no merger with a company that requires registration or any other kind of authorisation whatsoever by the competent authority under any Maltese law, other than this Act, or which holds any other equivalent authorisation by a European or overseas regulatory authority shall be permissible under this Act;
(c) undergo any reconstruction or division; or
(d) increase or reduce its capital or effect any 
material change in voting rights.
(3) It shall be the duty of all members of the board of 
administration of a licence holder to notify the competent auth ority 
immediately upon becoming aware th at such person or licence hol der 
intends to take any of the actio ns set out in sub-articles (1) and (2).
(4) Upon receipt of such notification or receipt of such 
information as the competent authority may lawfully require, whichever is the later, the comp etent authority shall issue a n otice -
(a) granting unconditional consent to the taking of 
the action; or
(b) granting consent to the taking of the action 
subject to such conditions as the competent authority may deem appropriate; or
(c) refusing consent to the taking of the action, and 
if it refuses to grant consent, it shall inform the person or t he 
licence holder concerned in writing for the reason for its refusal.
(5) In assessing the notification and the information referred 
to in this article, the competent authority shall, in order to ensure the 
sound and prudent management of the licence holder in which an acquisition is proposed, and having regard to the likely influe nce of 
the proposed acquirer on the licen ce holder, assess the suitabi lity of 
the proposed acquirer and the financial soundness of the propos ed 
acquisition in accordance w ith the following criteria:
(a) the reputation of the proposed acquirer;
      
VIRTUAL FINANCIAL ASSETS [CAP. 590. 25
(b) the reputation, knowledge , skills and experience, 
as set out in article 24(1)(a), of any member of the board of directors and any member of senior management who will direct the business of the licence holder as a result of the proposed acquisition;
(c) the financial soundness of  the proposed acquirer, 
in particular in relation to the type of business pursued and 
envisaged in the licence holder in which the acquisition is proposed;
(d) whether the licence holder will be able to 
comply and continue to comply with the prudential requirements based on this Act and any regulations made and 
rules issued thereunder and, where applicable, other European Union laws, including whether the group of which it will become a part has a structure th at makes it possible to exercis e 
effective supervision, effectiv ely exchange information among 
the competent authority and the overseas regulatory authorities  
and determine the allocation of responsibilities among the competent authority and the ove rseas regulatory authorities;
(e) whether there are reasonable grounds to suspect 
that, in connection with the proposed acquisition, money laundering or terrorist financing within the meaning of Article  
1 of 
Directive 2015/849/EU  is being or has been committed or 
attempted, or that the proposed acquisition could increase the 
risk thereof.
(6) If any person or any licence holder takes or decides to 
take any action set out in sub-article (1) or (2) without obtai ning the 
consent of the competent authority, then, without prejudice to any 
other penalty which may be imposed under this Act, the competen t 
authority shall have the power to make an order:
(a) restraining such person or licence holder from 
taking, or continuing with, such action;
(b) declaring such action to be null and void;
(c) requiring such person or licence holder to take 
such steps as may be necessary to restore the position existing  
immediately before the action was taken;
(d) restraining such person or licence holder from 
exercising any rights which such action would, if lawful, have conferred upon them; or
(e) restraining such person or licence holder from 
taking any similar action or any other action within the categories set out in sub- articles (1) and (2). 
26 [CAP. 590. VIRTUAL FINANCIAL ASSETS
Advertisements. 29. (1) No person, other than licence holders, may issue 
or cause to be issued an advertis ement relating to a VFA servic e in or 
from within Malta unless its con tents have been vetted and appr oved 
by the licence holder’s board of administration.
(2) The competent authority may, from time to time, issue 
such rules or directives to licence holders as it may consider appropriate in order to set minimum standards and requirements which are to be observed by licence holders when issuing or approving advertisements in accordance with sub-article (1). Su ch 
rules or directives may also incl ude provision for such exempti ons or 
conditions as may be specified therein and may make different provision for different cases or  classes of cases, under such t erms and 
conditions as may be prescribed.
(3) The competent authority may impose such conditions, 
limitations and restrictions on a licence holder with respect t o the 
issue or approval of advertisemen ts, as it may consider appropr iate.
Website. 30. Where the licence holder maintains a website, the person 
responsible for the licence hol der’s compliance function shall ensure 
that its homepage at least contains such information and in suc h 
format as may be required by the competent authority by means o f 
rules issued under this Act. 
VFA licence 
holders unable to 
meet obligations.31. Notwithstanding any investigation provided for in this 
Act, where a VFA licence holder considers that it is likely to become 
unable to meet its obligations, it shall immediately inform the  
competent authority in writing.
Certificate of 
compliance.32. Without prejudice to any other obligations imposed 
under this Act, a licence holder shall be required to submit to  t h e  
competent authority on an annual basis a certificate of complia nce in 
the form and manner required by the competent authority confirm ing 
the licence holder’s compliance with all the obligations laid d own in 
this Act or any regulations made and rules issued thereunder du ring 
the period concerned: 
Provided that in the event of a breach of any provision of 
this Act, regulations made or rules issued thereunder, the lice nce 
holder shall include the particul ar breach and any other additi onal 
information as may be required by the competent authority in th e 
compliance certificate:
Provided further that, where the licence holder is an 
individual, the licence holder its elf shall be required to subm it the 
compliance certificate to t he competent authority.
PART VI
Prevention of Market Abuse
      
VIRTUAL FINANCIAL ASSETS [CAP. 590. 27
Scope and 
jurisdiction.33. The prohibitions and requiremen ts laid down in this Part 
shall apply to acts carried out by any person in Malta or outsi de 
Malta, as prescribed or as may be  prescribed by or under this A ct or 
regulations made or rules issued thereunder, concerning virtual  
financial assets that are admitted to trading on a VFA exchange , or 
for which a request for admission to trading on such VFA exchan ge 
has been made.
Prohibition of 
insider dealing.34. (1) Insider dealing, recommending or inducing 
another person to engage in insi der dealing, as referred to in this 
article, shall constitute an offe nce when committed intentional ly.
(2) It shall also be an offence to attempt to commit any of 
the offences referred to in sub-article (1).
(3) Inciting, aiding or abetting any of the offences referred 
to in sub-article (1) shall also amount to an offence.
(4) For the purposes of sub-article  (1), insider dealing arises 
where a person possesses insid e information and uses that 
information by acquiring or disposing of, for its own account o r for 
the account of a third party, directly or indirectly, virtual f inancial 
assets to which that  information relates.
(5) For the purposes of sub-ar ticle (1), recommending that 
another person engage in insider dealing, or inducing another p erson 
to engage in insider dealing, a rises where the person possesses  inside 
information and:
(a) recommends, on the basis of that information, 
that another person acquire or dispose of virtual financial assets to which that information relates, or induces that perso n 
to make such an acquisition or disposal; or
(b) recommends, on the basis of that information, 
that another person cancels or amends an order concerning a virtual financial asset to which  that information relates, or 
induces that person to make such a cancellation or amendment:
Provided that the use of the recommendations or 
inducements amounts to insider dealing where the person using t he 
recommendation or inducement knows that it is based upon inside  
information.
(6) The provisions of this article apply to any person in the 
situations or circumstances pres cribed or as may be prescribed.
Prohibition of 
unlawful 
disclosure of inside 
information.35. (1) Unlawful disclosure of inside information shall 
also constitute an offence under this Act when committed intentionally.
(2) Inciting, aiding or abetting the offence referred to in 
28 [CAP. 590. VIRTUAL FINANCIAL ASSETS
sub-article (1) shall also  amount to an offence.
(3) For the purposes of this ar ticle, unlawful disclosure of 
inside information arises where a  person possesses inside infor mation 
and discloses that information to any other person, except in c ases 
where such disclosure is permitted pursuant to any provisions o f this 
Act, regulations made or rules issued thereunder.
(4) The provisions of this article apply to any person in the 
situations or circumstances prescribed or as may be prescribed.
(5) For the purposes of this Act , the onward disclosure of 
recommendations or inducements r eferred to in article 34(5) amo unts 
to unlawful disclosure of inside information where the person disclosing the recommendation or inducement knows that it was based on inside information.
(6) This article shall be applied in accordance with the laws 
of the freedom of th e press and the free dom of expression.
Prohibition of 
market 
manipulation.36. (1) Market manipulation, as referred to in this 
article, shall constitute an offe nce in severe cases or when co mmitted 
intentionally.
(2) It shall also be an offence to attempt to commit any of 
the offences referred to in sub-article (1).
(3) Inciting, aiding or abetting the offence referred to in 
sub-article (1) shall also  amount to an offence.
(4) For the purposes of this ar ticle, "market manipulation" 
means the manipulation or attempted manipulation of a virtual financial asset or a benchmark through the employment of an abu sive 
strategy that may be carried out by any available means of trad ing or 
other means, as prescribed or as may be prescribed.
Detection and 
report on market 
abuse.37. Without prejudice to any other obligations under this 
Act, regulations made or rules issued thereunder, a VFA exchang e 
shall have in place effective systems, procedures and arrangeme nts to 
monitor and detect market abuse and where it suspects that ther e may 
exist circumstances to indicate that any violation of the provi sions 
under this Part may have been committed, is being committed or is 
likely in the circumstances to be committed, it shall immediate ly 
report such suspicion to the competent authority.
PART VII
Regulatory and Inve stigatory Powers
Minister’s power 
to make 
regulations.38. (1) The Minister, acting on the advice of the 
competent authority, may make regulations to give effect to the  
provisions of this Act, and without prejudice to the generality  of the 
      
VIRTUAL FINANCIAL ASSETS [CAP. 590. 29
foregoing may, by such regulations, in particular, do any of th e 
following:
(a) amend the definitions contained in this Act;
(b) regulate the activities of issuers, VFA agents and 
licence holders, as well as ser vices provided and activities 
carried on in conjunction therewith or in relation thereto; provide for any matter he may deem expedient including the creation and exercise of rights by or for the benefit of the public, the imposition of duties and obligations on the issuers , 
VFA agents, licence holders or persons responsible for the 
management or administration thereof, the regulation of branches established by licence holders, outsourcing or agency 
arrangements and of any fees and, or any other charges imposed directly or indirectly on investors; prescribe investment restrictions applicab le to retail investors investin g 
or wishing to invest, as applicable, in virtual financial asset s, 
and for the purpose of this paragraph "retail investor" shall mean an investor who is considered to be a retail client in terms of Article 4(11) of MiFID but shall exclude any retail client who may be treated as professional on request within the  
meaning of Annex II to MiFID; provide for the safekeeping and custody of the cryptographic keys and for the requirement to appoint a custodian, and prescribe and regulate in the most extensive manner the functions, duties, responsibilities and obligations of the custodian, and for the purpose of this paragraph "custodian" shall include a sub-custodian; require the keeping of records with respect to the transactions and financial position of issuers a nd licence holders and for the 
inspection of those records, and prescribe reporting and disclosure requirements, including the preparation of periodical reports and the furnishing of those reports to investors, unitholders and to others;
(c) establish schemes or other arrangements for the 
compensation of investors in cases where licence holders or any categories thereof as may b e specified, are unable to 
satisfy their obligations towards investors or claims in respec t 
of any liability incurred by them in connection with the carrying out of any activity in regard to which they are licensed, and to regulate the management and the financing of any such schemes or arrangements, and the contributions and levies to be paid thereto, to set the minimum and maximum levels of compensation payable thereunder and may under such schemes and arrangements distinguish between different classes of investors and ex clude certain classes from 
compensation, and to make provision for the regulation of and for any other aspect related to such schemes or arrangements and may moreover provide that su ch schemes or arrangements 
30 [CAP. 590. VIRTUAL FINANCIAL ASSETS
as may be prescribed shall have a legal personality distinct 
from that of the contributors thereto and of the competent authority and provide for the judicial and legal representation  
thereof; and such schemes shall be exempt from the payment of income tax as from the date of establishment of such schemes;
(d) define the criteria for determining whether a 
holding is an indirect holding for the purposes of determining whether a qualifying holding exists;
(e) define the criteria for determining whether the 
systems and security access prot ocols of issuers, applicants or  
licence holders, as applicable, meet or are maintained to the appropriate high international standards that may be established from time to time;
(f) regulate the promotion or sale by or on behalf of 
any issuer or licence holder, and by any means, of an initial virtual financial asset offering or of a VFA service or of any 
DLT asset, including the crite ria and procedures for the 
granting or refusing of consent by the competent authority pursuant to the provisions of article 30;
(g) amend the provisions of article 50 on the 
circumstances in which auditors are obliged to communicate information to the competent authority, to prescribe regulations governing the disclosure by auditors of information pursuant to article 50 and to establish supervisory  
and disciplinary procedures for  auditors in respect of their 
duties under the provisions of article 50;
(h) regulate the drawing-up, registration, 
publication and distribution in Malta of whitepapers relating t o 
offerings, admission or trading of virtual financial assets on a 
VFA exchange where the respective issuer’s head office is located in a country outside Malta and to make provision for the recognition of such whitepape rs taking into account the 
obligations emanating from European legislation or Malta’s international commitments;
(i) provide for and regulate the payment by any 
person of registration, licence  or other fees and such other 
charges payable to the compete nt authority in respect of any 
matter provided for, by or under this Act or any regulations made under this article , as may be prescribed;
(j) exempt any issuer, VFA agent, licence holder or 
any other person, VFA service,  DLT asset, whitepaper or 
advertisement from any one or m ore of the provisions of this 
Act subject to such variations, additions, adaptations and 
      
VIRTUAL FINANCIAL ASSETS [CAP. 590. 31
modifications as may be prescribed and subject to such 
conditions or other requirements, including other forms of registration, authorisation and notification procedures, as may  
be prescribed;
(k) establish prudential requirements for VFA 
agents and licence holders; regulate the supervision on a 
consolidated basis, provide for  the consultation, co-ordination , 
co-operation and the sharing and exchange of information with national, European and other third country regulatory authorities as may be necessary;  provide for the exchange of 
information with the ESRB, central banks which are members of the European System of Central Banks, including the Central Bank of Malta, exchange of information with ESAs and exchange of information with other departments of government administrations in other Member States responsible for the law on th e supervision of institutions, 
financial institutions and insurance undertakings and with inspectors acting on behalf of those departments as may be necessary; provide for the e stablishment of colleges of 
supervisors; provide for the exercise of powers by the competent authority on issuers, VFA agents and licence holders, or their effective managers; provide for the establishment and imposition of administrative penalties on issuers, VFA agents, licence holders or others as specified therein or other measures for t he contravention of any of the 
regulations, and to provide for appeals therefrom to the Tribunal or any other tribunal that he may prescribe; provide for the obligations of the competent authority to report to the  
ESAs and the European Commission as may be required and specified in the said regulations;
(l) provide for reporting and other requirements and 
conditions which a person must satisfy, on a continuing and ongoing basis and to establish the circumstances and the manner in which requirements and conditions may be varied, suspended or revoked;
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S.L. 373.01.(m) establish centralised or decentralised data 
repositories or other arrangements for the collection, recording, organisation, structuring, storage, adaptation or alteration, retrieval, consultation, use, disclosure by transmission, dissemination or otherwise making available, alignment or combination, restric tion, erasure or destruction, 
in accordance with European leg islation, of such information 
and documentation as may be required by subject persons to fulfil their customer due diligence requirements provided for under the 
Prevention of Money Laundering and Funding of 
Terrorism Regulations ; and to make provision for the 
regulation of and for any other aspect related to such data 
32 [CAP. 590. VIRTUAL FINANCIAL ASSETS
repositories or arrangements and may moreover provide that 
such data repositories or arra ngements as may be prescribed 
shall have a legal personality distinct from that of the subjec t 
persons thereto and of the compet ent authority and provide for 
the judicial and legal representation thereof;
(n) in consultation with the competent authority, 
amend the Second Schedule in order to include any services which relate to virtual financial assets and which are not list ed 
in the said Second Schedule an d make regulations relative 
thereto;
(o) transpose, implement and give effect to the 
provisions and requirements of Directives, Regulations and 
any other legislative meas ures of the European Union 
requiring transposition and, or imp lementation, as they may be 
amended from time to time, including any implementing measures that may be issued thereunder and relating to DLT assets, issuers, VFA agents, licence holders and others as may be specified therein; regulations made under this paragraph, and strictly related to transposition or implementation as aforesaid, may provide that any provision of this Act or of any  
other law shall not apply to matters falling under the regulations, and that in so far as any of the provisions of the  
regulations are inconsistent with the provisions of this Act or  
of any other law, such provisions  in any such regulations shall  
prevail;
(p) provide for arrangements for the investigation of 
complaints about issuers, VFA  agents or licence holders;
(q) prescribe anything that is to be or which may be 
prescribed;
(r) provide for any matter incidental to or connected 
with any of the above.
(2) Regulations made under this article may also contain 
provisions for enabling a person who has entered, or offered to  enter, 
into a VFA agreement with a licence holder to rescind the agree ment 
or withdraw the offer within such period and in such manner as may 
be prescribed, and in particular, but without prejudice to the 
generality of the foregoing, may make provision -
(a) for requiring the service of notice with respect to 
the rights exercisable under the regulations;
(b) for the restitution of assets and the making or 
recovery of payments where t hose rights are exercised;
(c) for such other matters as are incidental to or 
      
VIRTUAL FINANCIAL ASSETS [CAP. 590. 33
connected with any of the above.
(3) Regulations made under this article, may be made 
subject to such exemptions or c onditions as may be specified th erein, 
may make different provision for  different cases, circumstances  o r  
purposes and may give to the competent authority such powers of  
adaptation of the regulations a s may also be so specified.
(4) Where regulations have been made in terms of this 
article, the competent authority may issue rules within the mea ning of 
article 15 for the better carrying out and to better implement the 
provisions of the regulations.
(5) Regulations made under this article may impose:
(a) administrative penalties which may not exceed 
one hundred and fifty thousand euro (€150,000) for each infringement or failure to comply, as the case may be;
(b) punishments or other penalties in respect of any 
contravention or failure of co mpliance not exceeding a fine 
(multa ) of fifteen million euro (€15,000,000) or up to three 
times the profits made or losses avoided by virtue of the offence, whichever is the greater, or to imprisonment for a t e r m  n o t  e x c e e d i n g  s i x  y e a r s ,  o r  b o t h  s u c h  f i n e  a n d  imprisonment; and
(c) administrative penalties and fines higher than 
one hundred and fifty thousand euro (€150,000), where deemed necessary or appropriate for any contravention of or 
failure of compliance with any EU Directive or EU Regulation or of any regulations made under this article to transpose or t o 
give effect to any EU Dir ective or EU Regulation.
(6) Regulations made under this Act and any amendment or 
revocation of such regulations, may be published in the English  
language only.
(7) The exercise of any of the powers assigned under this 
article shall be subject to any obligations or rights arising f rom 
Malta’s international commitments.
Power of 
competent 
authority to require 
information.39. (1) The competent authority may, by notice in 
writing, require -
(a) any person who is or was providing, or who 
appears to be or to have been providing a VFA service as well 
as any persons that control th em or are controlled by them;
(b) any issuer, VFA agent, intermediary involved in 
the initial VFA offering as well as any persons that control them or are controlled by them;
34 [CAP. 590. VIRTUAL FINANCIAL ASSETS
(c) any person who has issued, or appears to have 
issued an advertisement falling within the provisions of articles 6 or 29;
(d) an auditor of a person regulated under this Act;
(e) any other person who appears to be in possession 
of relevant information or documentation,
to do all or any of the following:
(i) to furnish to the competent authority, at 
such time and place and in such form as it may specify, such information and documentation as it may require, including the power to require existing telephone, existing data tra ffic and existing DLT 
records, with respect to any such service, DLT asset, advertisement or website as aforesaid, or with respect to any person with whom the licence holder or VFA agent has close links within the meaning of article 17;
(ii) to review the determination made in terms 
of articles 3 or 13 and confirm in writing the competent authority that such determination is true and accurate or otherwise;
(iii) to furnish to the competent authority any 
information or documentation aforesaid verified in such manner as it may specify;
(iv) to attend before the competent authority, or 
before a person appointed by it, at such time and place as it may specify, to answer questions and provide information and documentation with respect to any such service, scheme or advertisement as aforesaid:
Provided that the powers in this article shall not permit 
the competent authority to demand information about source code s of 
any proprietary technology or of information of highly sensitiv e, 
intellectual property which is protected by law and which relat es to 
innovative DLT or smart contracts.
(2) Without prejudice to anything which the competent 
authority may require under sub- article (1), all information in  respect 
of virtual financial assets traded on a VFA exchange and held b y the 
exchange shall be freely accessib le to the competent authority:
Provided that the provisions of this sub-article shall also 
be applicable where a virtual financial asset is determined by the 
competent authority to be electronic money or a financial instr ument 
      
VIRTUAL FINANCIAL ASSETS [CAP. 590. 35
in terms of article 13(2)(b).
(3) The competent authority may take copies of any 
documents furnished or pr ovided under this article.
(4) Where the person required to provide information or 
documentation under this article does not have the relevant information or documentation, he shall disclose to the competen t 
authority where, to the best of his knowledge, that information  o r  
documentation is, and the competent authority may require any person, whether indicated as afo resaid or not, who appears to i t to be 
in possession of that informati on or documentation, to provide it.
(5) A statement made and documentation provided in 
pursuance of any requirement under this article may be used in evidence against the person making the statement or providing t he 
documentation as well as against a ny person to whom they relate .
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Cap. 9.(6) The provisions of this article shall not apply to 
information or documentation wh ich is privileged in accordance with 
the provisions of article 642(1) of the Criminal Code  or which refer 
to cryptographic keys belonging to the person required to provi de 
information or documenta tion under this article:
Provided that the provisions of this sub-article shall not 
apply to the actual information protected by the cryptographic keys.
(7) The power to require the production of documentation 
under the provisions of this article shall be without prejudice  to any 
lien or charge claimed by any person in relation to such documentation.
(8) Where the competent authority has appointed a person 
under article 42(1)(c), such pers on shall, for the purposes of carrying 
out his functions under his appointment, have all the powers conferred on the competent authority by this article and a requirement made by it shall be deemed to be and have the same 
force and effect as a requireme nt of the competent authority.
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Cap. 204.(9) Without prejudice to the other provisions of this article, 
a licence holder may be required to submit to the Central Bank of 
Malta such information as the Ba nk may reasonably require for t he 
discharge of its duties under the Central Bank of Malta Act .
Appointment of 
inspectors.40. (1) The competent authority may, whenever it 
deems it necessary or expedient, a ppoint an inspector or inspec tors to 
investigate and report on the affairs of any issuers or VFA age nts or 
licence holders or any other pers ons referred to in article 39( 1).
(2) An inspector appointed under sub-article (1) -
(a) may also, if he thinks it necessary or expedient 
36 [CAP. 590. VIRTUAL FINANCIAL ASSETS
for the purposes of that investigation, investigate the affairs  of 
any person mentioned in sub-article (1);
(b) shall have and may exercise all the powers 
conferred on the competent authority by article 39, and any requirement made by it shall be deemed to be and have the same force and effect as a requirement of the competent authority;
(c) may, and if so directed by the competent 
authority shall, make interim reports and on the conclusion of his investigation shall make a f inal report to the said authori ty.
(3) The competent authority shall have power to order that 
all expenses of, and incidental to, an investigation pursuant t o this 
article be paid by the persons concerned.
(4) For the purposes of this ar ticle, an inspector shall be a 
person considered by the competent authority as possessing suit able 
expertise to exercise such function.
Power to issue 
directives.41. (1) Without prejudice to any of the powers 
conferred on it by articles 39 and 40, the competent authority may, 
whenever it deems it necessary, and whether upon a report by an  
inspector appointed under article 40 or not, give, by notice in  writing, 
such directives as it may deem appropriate in the circumstances ; and 
any person as is referred to in article 39(1) to whom the notic e is 
given shall obey, comply with and otherwise give effect to any such 
directive within the time and in the manner stated in the direc tive or 
further directive.
(2) Without prejudice to the generality of the foregoing 
provisions of this article, a di rective under this article may -
(a) require anything to be done or be omitted to be 
done, or impose any prohibition, restriction or limitation, or any other requirement, including any requirement emanating from European Union legislatio n, and confer powers, with 
respect to any offering or trading of DLT assets, VFA service, transaction or other act, or to any assets, or to any other thi ng 
whatsoever;
(b) require that any person having functions in 
r e l a t i o n  t o  t h e  i s s u e r ,  V F A  a g e n t  o r  l i c e n c e  h o l d e r  b e  prohibited, temporarily or otherwise, suspended from carrying out activities under this Act, or removed and replaced by another person acceptable to the competent authority;
(c) require an issuer, VFA agent, licence holder or 
any person who is or was, or who appears to be or to have been undertaking an activity or providing a service regulated under 
      
VIRTUAL FINANCIAL ASSETS [CAP. 590. 37
this Act to cease operations and to wind up its affairs, in 
accordance with such procedur es and directions as may be 
specified in the directive, which may provide for the appointment of a person to take possession and control of all 
documents, records and assets belonging to or in the possession or control of the issuer, VFA agent, licence holder or such other person;
(d) require a licence holder to submit a financial 
recovery plan, as may be determined in the rules, if it considers that the interests of investors, consumers, creditors  
or other interested pe rsons are likely to be prejudiced owing t o 
a deterioration in the financial  position of the licence holder ;
(e) require the removal of a virtual financial asset 
from trading on a VFA exchange or the suspension of trading in such virtual financial asset:
Provided that the provisions of this paragraph 
s h a l l  a l s o  b e  a p p l i c a b l e  w h e r e  a  v i r t u a l  f i n a n c i a l  a s s e t  i s  determined by the competent authority to be electronic money or a financial instrument in terms of article 13(2)(b);
(f) request any person to ta ke steps to reduce the 
size of the position or exposure:
Provided that in applying the provisions of paragraph 
(c), the competent authority may also appoint a competent perso n to 
act as liquidator for the purposes of winding up the affairs of  a n  
issuer, VFA agent or licence holder under this Act; and such pe rson 
shall be the liquidator of the issuer, VFA agent or licence hol der for 
all purposes of law to the exc lusion of any other person.
(3) The power to give directives under this article shall 
include the power to vary, alter, add to or withdraw any direct ive, as 
well as the power to issue new or further directives.
(4) Where the competent authority is satisfied that the 
circumstances so warrant, it may at any time make public any directive it has give n under any of the pr ovisions of this arti cle.
Power of the 
competent 
authority to protect the public interest.42. (1) Without prejudice to the powers conferred to the 
competent authority under this Act, the competent authority may , 
where it is satisfied that suffic ient circumstances exist, proc eed to 
take any one or more of t he following measures:
(a) appoint a person to advise the issuer, VFA agent 
or licence holder in the pr oper conduct of t heir business;
(b) appoint a person to take charge of the assets of 
the issuer, VFA agent or licence holder, or any portion of them , 
for the purposes of safeguarding the interests of investors, 
38 [CAP. 590. VIRTUAL FINANCIAL ASSETS
consumers, creditors or, if any, unitholders, of the issuer, VF A 
agent or licence holder;
(c) appoint a person to assume control of the 
business of the issuer, VFA agent or licence holder, either to carry on that business or to carry out such other function or functions in respect of such busi ness, or part thereof, as the 
competent authority may direct;
(d) fix the remuneration to be paid by the issuer, 
VFA agent or licence holder to any person appointed under article 41 or under this article;
(e) do such other act as it may deem appropriate in 
the circumstances to give better effect to the implementation of the provisions of this article, 
and, having adopted any one or more of the measures aforesaid, the 
competent authority may further proceed in any one or more such  
measures, whether in addition th ereto or in substitution theref or.
(2) Where a person is appointed by the competent authority-
(a) under sub-article (1)(a), it shall be the duty of 
the issuer, VFA agent or licence holder, as applicable, to act in 
accordance with the advice giv en by such person unless and 
until the competent authority, on representation made to it, directs otherwise;
(b) under sub-article (1)(b), the issuer, VFA agent or 
licence holder, as applicable, shall deliver to such person all  
the assets, whether movable or immovable, of which he is placed in charge, and all the powers, functions and duties of the said issuer, VFA agent or licence holder in respect of thos e 
assets, including, if such issue r, VFA agent or licence holder is 
a legal person, those exercisab le by the legal person in a 
general meeting, or by the members of the board of administration, or by any other person, including the legal and  
judicial representation of s uch legal person, shall be 
exercisable by and vest in the person appointed under the said paragraph to the exclusion of any other person;
(c) under sub-article (1)(c), the issuer, VFA agent or 
licence holder, as applicable, shall submit its business to the  
control of such person and shall provide such person with such facilities as may be required to carry on that business or to carry out the functions assigned to such person under the said 
paragraph; and all the powers, functions and duties of the said  
issuer, VFA agent or licence holder, including, if such issuer,  
V F A  a g e n t  o r  l i c e n c e  h o l d e r  i s  a  l e g a l  p e r s o n ,  t h o s e  exercisable by the legal person in a general meeting, or by the  
      
VIRTUAL FINANCIAL ASSETS [CAP. 590. 39
members of the board of administration, or by any other 
person, including the legal and judicial representation of such  
legal person in all matters, sha ll be exercisable by and vest i n 
such person to the exclusion of any other person.
(3) The competent authority may, where it feels it is in the 
best interest of the public so to do, make or issue public stat ements or 
notices giving warnings or information about any measure taken in 
terms of this article.
(4) The competent authority may require the issuer, VFA 
agent or licence holder concerne d  t o  p a y  a l l  t h e  e x p e n s e s  o f ,  a nd 
incidental to, the publication or issue of public statements or  notices 
pursuant to this article, or such part thereof as it may deem appropriate; and any sum so due shall be recoverable by the competent authority in the same manner as an administrative pen alty 
imposed under this Act.
Right of entry. 43. (1) Any officer, employee or agent of the competent 
authority, on producing, if require d, evidence of his authority , may 
enter premises occupied by a person on whom a notice has been served under article 39 or whose affairs are being investigated  under 
article 40, for the purpose of obtaining there the information or 
documents required by that notice, or otherwise for the purpose  of the 
investigation, and of exercising any of the powers conferred by  the 
said articles.
(2) Where any officer, employee or agent of the competent 
authority has reasonable cause t o believe that if such notice a s is 
referred to in sub-article (1) were served it would not be comp lied 
with or that any documents to which it could relate would be removed, tampered with or destroyed, such person may, on producing, if required, evidence  of his authority, enter any pr emises 
referred to in sub-article (1) for the purpose of obtaining the re any 
information or documents specified in the authority, being information or documents that could have been required under su ch 
notice as is referred t o in sub-article (1).
(3) For the purposes of any action taken under the 
provisions of this article, the competent authority may request  t h e  
assistance of the Commissioner of Police, who may for such purp ose 
exercise such powers as are veste d in it for the prevention of offences 
and the enforcement of law and order.
Discontinuation or 
suspension from trading on a VFA 
exchange.44. (1) (a) The competent authority may, in accordance 
with rules issued under this Act, and whether of its own motion  or at 
the request of a VFA exchange on which a virtual financial asse t has 
been admitted to trading, discontinue or suspend the trading of  such 
virtual financial asset if it is satisfied that there are circu mstances 
which warrant such suspension or discontinuance.
40 [CAP. 590. VIRTUAL FINANCIAL ASSETS
(b) Without prejudice to the right of the 
competent authority under paragraph (a) to demand suspension or  
removal of a virtual financial asset from trading, a VFA exchan ge 
operator may suspend or remove from trading a virtual financial  asset 
which no longer complies with the definition of a virtual finan cial 
asset or the bye-laws of the VFA exchange unless such a step wo uld 
be likely to cause significant d amage to the investors’ interes ts or the 
orderly functioning of the VFA exchange. The VFA exchange operator that suspends or removes from trading a virtual financ ial 
asset shall make public this deci sion and communicate the relev ant 
information to the competent authority. Where required, the competent authority shall inform the European regulatory author ities 
of the other Member States or EEA States of this decision.
(c) When the competent authority demands the 
suspension or removal of a virtual financial asset from trading  on one 
or more VFA exchanges, it shall immediately make public its decision and inform any regulatory  authority, as required, purs uant to 
the obligations emanating from European legislation or Malta’s international commitments.
(d) A VFA exchange operator that suspends or 
removes from trading a virtual fi nancial asset shall also suspe nd or 
remove any derivatives thereof which relate or are referenced t o that 
virtual financial asset as may b e necessary to support the obje ctives 
of the suspension or removal of the underlying virtual financia l asset. 
The VFA exchange operator shall make public its decision on the  
suspension or removal of the virtual financial asset and of any  related 
derivatives and communicate the relevant decisions to the compe tent 
authority:
Provided that the term "derivatives" in this 
paragraph shall exclude the der ivatives as referred to in point s (4) to 
(10) of Section C of Annex I to MiFID.
(e) Paragraph (d) shall also apply when the 
suspension from trading of a virtual financial asset or derivat ives 
thereof which relate or are referenced to that virtual financia l asset is 
lifted.
(f) The notification procedure referred to in 
paragraph (d) shall also apply in the case where the decision t o 
suspend or remove from trading a virtual financial asset or derivatives thereof which relate or are referenced to that virt ual 
financial asset is taken b y the competent authority.
(2) If the trading of any virtual financial asset is suspended 
under sub-article (1) such virtua l financial asset may still be  treated 
as being traded on a VFA exchange for such purposes as may be s et 
out in rules issued under this Act.
      
VIRTUAL FINANCIAL ASSETS [CAP. 590. 41
(3) If the competent authority discontinues or suspends the 
trading of any virtual financial assets, the issuer shall have a right of 
appeal to the Tribunal in terms of article 51.
(4) This article shall also be applicable where a virtual 
financial asset is determined by the competent authority to be electronic money or a financial instrument in terms of article 
13(2)(b).
Notice of 
discontinuation or 
suspension.45. (1) If the competent authority -
(a) proposes to discontinue or suspend the trading of 
a virtual financial asse t on a VFA exchange; or
(b) decides to suspend the trading of a virtual 
financial asset on a VFA exc hange with immediate effect,
it must give the issuer of such virtual financial asset notice in writing:
Provided that a notice under this sub-article shall not be 
required when a virtual financial asset has been admitted to tr ading 
irrespective of the issuer’s will.
(2) The discontinuance or suspension of the trading of a 
virtual financial asset shall ta ke effect immediately or on suc h date as 
may be specified in the no tice under sub-article (1).
(3) A notice given under sub-article (1) shall -
(a) give details of the disc ontinuance or suspension;
(b) state the competent authority’s reason for the 
discontinuance or suspension, provided that the interest of a VFA exchange or the interest of the public or the investors shall constitute sufficient reason;
(c) inform the issuer of a virtual financial asset that 
he may make representations to the competent authority within such period as may be spec ified in the notice; and
(d) inform the issuer of the date on which the 
discontinuance or suspension will take effect or of the date on  
which the suspension took effect if the notice under sub-articl e 
(1) states that suspension is to take place with immediate effect:
Provided that the obligation to give notice of a decision 
to suspend the trading of a virtual financial asset and the rig ht of the 
issuer to make representations i n relation thereto shall be wit hout 
prejudice to the power of the competent authority to suspend th e 
trading of any virtual financia l assets with immediate effect.
42 [CAP. 590. VIRTUAL FINANCIAL ASSETS
(4) The competent authority may extend the period within 
which representations  may be made to it.
(5) If having considered any r epresentations made by the 
issuer of a virtual financial as set the competent authority dec ides -
(a) to discontinue or suspend the trading of a virtual 
financial asset; or
(b) if the suspension has taken effect, not to cancel 
it,
the competent authority shall give the issuer of a virtual fina ncial 
asset notice in writing of its decision.
(6) If the competent authority decides to discontinue or 
suspend the trading of a virtual financial asset, or if the sus pension 
has taken effect, not to cancel it, the issuer of the virtual f inancial 
asset concerned shall have a right of appeal to the Tribunal an d a 
notice given under sub-article (5)  shall inform the issuer of h is right 
to refer the matter to the Tribunal.
(7) The effect of cancelling a discontinuance is that the 
virtual financial asse t concerned is to be re-admitted to tradi ng on the 
VFA exchange on which it ha d been admitted to trading.
(8) The provisions of this article shall also be applicable 
where a virtual financial asset is determined by the competent authority to be electronic money or a financial instrument in t erms of 
article 13(2)(b).
Temporary 
suspension of trading on a VFA 
exchange.46. (1) Without prejudice to the provisions of article 45, 
the competent authority shall have the power to suspend tempora rily 
the trading in a virtual financial asset on any VFA exchange, i f in its 
opinion, the orderly transaction of business is being prevented , or is 
likely to be prevented.
(2) The Minister may recommend to the competent 
authority the temporary suspension of trading if he is of the o pinion 
that the orderly transaction of b usiness of a VF A exchange is b eing 
disrupted because of any occurrence which in the opinion of the  
Minister merits such closure.
(3) The competent authority may order that, for such time as 
it may determine, no trading of any kind may be transacted in o ne or 
more specified virtual financial assets if it has reason to bel ieve that 
this would be in the interest of the VFA exchange concerned, th e 
public or investors in general.
(4) No transaction may be executed at any time in the event 
of the temporary suspension of trading under this article. Any transaction so executed in contra vention of this sub-article sh all be 
      
VIRTUAL FINANCIAL ASSETS [CAP. 590. 43
invalid.
(5) This article shall also be applicable where a virtual 
financial asset is determined by the competent authority to be electronic money or a financial instrument in terms of article 13(2)(b).
Power of the 
competent 
authority to 
introduce test.47. Without prejudice to any other powers assigned to the 
competent authority in terms of this Act, the competent authori ty 
shall introduce a test applicable  to issuers, VF A agents and li cence 
holders for the purpose of deter mining whether a DLT asset qual ifies 
as electronic money, a financial instrument, virtual financial asset or 
virtual token:
Provided that such test shall be applicable prior to the 
submission of the whitepaper to the competent authority or the provision of a VFA servi ce, as the case may be.
Administrative 
penalties and other 
measures. 48. (1) Without prejudice to any other powers assigned 
to the competent authority in terms of this Act, where a licenc e holder 
or the secretary, a member of the board of administration or an y other 
person responsible for a licence holder contravenes or fails to  comply 
with any of the conditions imposed in a licence, and, or where the 
competent authority is satisfied that a person’s conduct amount s to a 
breach of any of the provisions of this Act, regulations made o r rules 
issued thereunder, including failure to cooperate in an investi gation, 
the competent authority may by notice in writing and without recourse to a court hearing impose on the licence holder, secre tary, 
member of the board of administration and, or any other person as the 
case may be, an administrative penalty which may not exceed one  
hundred and fifty thousand euro (€150,000) for each infringemen t or 
failure to comply, as  the case may be:
Provided that the provisions of this sub-article shall 
apply to issuers and VFA agents mutatis mutandis .
(2) Administrative penalties or  other measures that may be 
imposed by the competent authority on issuers, VFA agents, lice nce 
holders or others, as may be specified, may be imposed in the f orm of 
a fixed penalty, a daily penalty, or both.
(3) The imposition by the competent authority of an 
administrative penalty in terms of this article shall be withou t 
prejudice to any other consequence of the act or omission of th e 
offender under civil or criminal law:
Provided that in all cases where the competent authority 
imposes an administrative penalty in respect of anything done o r 
omitted to be done by any person and such act or omission also constitutes a criminal offence, no proceedings may be taken or continued against the said pers on in respect of such criminal o ffence.
44 [CAP. 590. VIRTUAL FINANCIAL ASSETS
(4) The competent authority may, by means of a public 
statement, disclose the name of the person sanctioned, the part icular 
breach of the provision of this Act, regulations made or rules issued 
thereunder, and the penalty or administrative measure imposed. The 
competent authority shall withhold such public disclosure where  it 
deems that such disclosure would seriously jeopardise the finan cial 
markets, be detrimental to the interests of investors or consum ers or 
cause disproportionate damage to the parties involved.
Obligation to state 
grounds for decisions.49. Any decision taken under this Act by the competent 
authority, including any rules issued or regulations made there under, 
shall state the grounds on which such a decision has been based .
PART VIII
Duty of Auditors
Auditor’s duty to 
report.50. (1) A licence holder shall appoint an auditor who 
shall have the duty to report immediately to the competent auth ority 
any fact or decision of which he becomes aware in his capacity as 
auditor of such licence holder which -
(a) is likely to lead to a serious qualification or 
refusal of the auditor’s report on the accounts of such licence  
holder; or
(b) constitutes or is likely to constitute a material 
breach of the legal or regulatory  requirements applicable to th e 
licence holders in or  under this Act; or
(c) gravely impairs the licence holder’s ability to 
continue as a going concern; or
(d) relates to any other matter which may be 
prescribed.
(2) An auditor of a licence holder shall report to the 
competent authority any facts or decision as specified in sub-a rticle 
(1) of any person having close links with such licence holder w ithin 
the meaning in article 17, of wh ich he becomes aware in his cap acity 
as auditor of the licence holder or of the person having such c lose 
links.
(3) No duty (including the duty of professional secrecy) to 
which an auditor of the licence holder may be subject, shall be  
regarded as contravened by reason of his communicating in good faith to the competent authority, whether or not in response to  a  
request from it, any information or opinion on a matter of whic h the 
auditor has become aware in his capacity as auditor of that lic ence 
holder and which is relevant to any functions of the competent authority under the provisions of this Act or is required to be  
communicated by virtue  of sub-article (1).
      
VIRTUAL FINANCIAL ASSETS [CAP. 590. 45
(4) The matters prescribed for the purposes of sub-article 
(1)(d) may include matters related to persons other than the li cence 
holder.
(5) An auditor of a licence holder shall, in the absence of 
compelling reasons not to do so, simultaneously report the information specified in sub-articles (1) and (2), in accordanc e with 
the provisions of sub-articles (3) and (4), to the board of 
administration of the licence holder.
(6) An auditor of a licence holder shall report annually to 
the competent authority on the licence holder’s systems and sec urity 
access protocols in the manner an d format required by the compe tent 
authority.
(7) The provisions of this article shall apply to issuers and 
VFA agents mutatis mutandis .
PART IX
Appeals, Remedies, Sanc tions and Confidentiality
Appeals. 51. (1) Subject to the provisions of this article and 
without prejudice to any other article under this Act, an appea l shall 
lie to the Tribunal with respect to:
(a) any decision under article 12(c) and (d);
(b) any notice in terms of article 13(2);
(c) any administrative pena lty imposed under article 
48;
(d) any refusal, variation, c ancellation or suspension 
of a licence under article 22(3);
(e) any notice issued or any order made in terms of 
articles 28, 44 and 45;
(f) any decision concerning an advertisement under 
articles 6 or 29;
(g) any punishment or penalty imposed under article 
38(5);
(h) any directive given under article 41; or
(i) any measure taken in terms of article 42(1), (2) 
and (4).
Cap. 330. (2) The provisions of article 21 of the Malta Financial 
Services Authority Ac t shall apply mutatis mutandis  to appeals that 
may be brought before the Tr ibunal under this article.
46 [CAP. 590. VIRTUAL FINANCIAL ASSETS
Powers of the court 
in the case of a 
likely 
contravention.52. (1) If, on an application by the competent authority 
made to the court, suc h court is satisfied -
(a) that there is reasonable likelihood that a person 
will contravene any of the provisions of this Act or of any regulations made or rules issued thereunder, or will contravene  
or fail to comply with any condition, obligation, requirement, rules, directive, or order made or given under any of the provisions of this Act; or
(b) that a person has contravened any such provision 
or has contravened or failed to comply with any such condition, obligation, requireme nt, rules, directive, or order 
and that steps could be taken to remedy the contravention or failure, 
the court may give such orders a s it may deem appropriate to re strain 
the contravention or, as the case may be, to require the person  
referred to in paragraph (a) or ( b), or any other person who ap pears to 
the court to have been knowingly concerned in the contravention , to 
take such steps as t he court may direct.
(2) If, on an application made under sub-article (1), the 
court is satisfied that a person has entered into any transacti on in 
contravention of any of the provisions of this Act, the court m ay 
order that person and any other person who appears to the court  to 
have been knowingly concerned in the contravention to take such  
steps as the court may direct for restoring the parties to the position in 
which they were before the t ransaction was entered into.
(3) If, on an application made under sub-article (1), the 
court is further satisfied that -
(a) profits have accrued to any person as a result of 
the contravention; or
(b) an investor has suffered loss or been otherwise 
adversely affected as a result of that contravention,
the court may order the person responsible for the contraventio n to 
pay into court such sum as appears to it to be just having rega rd to the 
extent of the profit, loss or adverse effect as aforesaid, and order such 
sum to be paid out as the court may direct to the persons who h ave 
entered into transactions as a result of which profits have acc rued or 
losses or adverse effects have  been suffered as aforesaid.
(4) For the purposes of this article the court may order the 
production by any person of such accounts and the provision of such 
information, and verified in such manner, as the court may deem  
appropriate.
(5) The provisions of this article shall be without prejudice 
      
VIRTUAL FINANCIAL ASSETS [CAP. 590. 47
to any right of any aggrieved pe rson to bring proceedings direc tly in 
respect of any right such person may otherwise have independent ly of 
the competent authority.
Offences. 53. (1) Without prejudice to any other article under this 
Act, any person who contravenes or fails to comply with any of the 
provisions of articles 3, 7, 13, 25, 26, 28, 39, 41 or 57 or of  article 39 
as applied by article 40 or of any court order made under artic le 52 or 
of any regulations made under article 38 shall be guilty of an offence.
(2) Any person who for the purposes of, or pursuant to, any 
of the provisions of this Act or of any regulations made thereu nder, or 
any condition, obligation, require ment, directive or order made  o r  
given as aforesaid, furnishes inf ormation or makes a statement which 
he knows to be inaccurate, false or misleading in any material respect, or recklessly furnishes  information or makes a stateme nt 
which is inaccurate, false or misleading in any material respec t, shall 
be guilty of an offence.
(3) Any person who is knowingly a party to the carrying on 
of any activity regulated under this Act, or any regulations ma de or 
rules issued thereunder, with a fraudulent intent or for a frau dulent 
purpose, shall be guilty of an offence.
(4) Any person who by any statement, promise or forecast 
which he knows to be misleading, false or deceptive, or by any dishonest concealment of material facts, or by the reckless mak ing 
(whether dishonest or otherwise)  of any statement, promise or 
forecast which is misleading, false or deceptive, induces or at tempts 
to induce another person to enter into or offer to enter into a  VF A 
agreement, shall be guilty of an offence.
(5) Any person who with intent to avoid detection of the 
commission of an offence under this Act removes, destroys, conc eals 
or fraudulently alters any book, document or other paper or rec ord, 
either tangible or intangible , shall be guilty of an offence.
(6) Any person who intentionally obstructs a person from 
exercising rights conferred by this Act shall be guilty of an o ffence.
Penalties. 54. (1) An issuer or a licence holder, other than a licence 
holder referred to in sub-article (2), guilty of an offence und er the 
provisions of article 53 shall be liable on conviction to a fin e (multa ) 
not exceeding ten million euro ( €10,000,000) or up to three tim es the 
profits made or losses avoided by virtue of the offence, whiche ver is 
the greater, or to imprisonment  for a term not exceeding six ye ars, or 
both such fine and imprisonment, unless such fine or term of imprisonment is otherwise imp osed under article 38(5).
(2) A VFA agent guilty of an offence under the provisions of 
article 53 shall be liable on conviction to a fine ( multa ) not exceeding 
48 [CAP. 590. VIRTUAL FINANCIAL ASSETS
five hundred thousand euro (€500,000) or to imprisonment for a term 
not exceeding six months, or bot h such fine and imprisonment, u nless 
such fine or term of imprisonmen t is otherwise imposed under ar ticle 
38(5).
Sanctions on 
members of the body of 
administration of 
the legal entity.55. Where obligations imposed in terms of the Act or any 
regulations made or rules issued thereunder apply to the issuer , VFA 
agent, licence holder or to any other legal entity, in the even t of a 
breach, sanctions can also be applied, subject to the condition s laid 
down in national law, to the members of the body of administrat ion of 
the legal entity concerned, and to other individuals who are responsible for the bre ach under national law.
Public statement as 
to person’s 
misconduct.56. (1) If it appears to the competent authority that a 
person who holds or who held a lic ence, or registration, or any  other 
person, has contravened any of the provisions of this Act or of  any 
regulations made under this Act or has contravened or failed to  
comply with any condition, obligation, requirement, rules, dire ctive 
or order made or given under any of the provisions of this Act,  the 
competent authority may publish a statement to that effect.
(2) Nothing in this article shall restrict or otherwise 
prejudice the powers of the compe tent authority under article 4 1(4).
Confidentiality. 57. (1) Information obtained by the competent authority 
or by its officers, employees or agents, as well as by auditors , 
inspectors or any other persons engaged by the competent author ity 
for the purposes of, or pursuant to, any of the provisions of t his Act, 
or of any regulations made or rules issued thereunder, or in th e 
discharge of any functions under any of the said provisions, sh all be 
treated as confidential and protected by the duty of profession al 
secrecy, and shall not be disclosed to any other person, except  in the 
following cases:
(a) where the disclosur e is required for the 
detection, prevention or prose cution of criminal offences 
under the criminal provisions of  this Act or any other law;
(b) where the information is disclosed with a view to 
the institution of, or otherwise for the purposes of any proceedings by the competent authority before any court under this Act;
(c) where the information is disclosed in civil or 
commercial proceedings in rela tion to the bankruptcy or 
dissolution and consequential winding up by the court of an issuer, VFA agent or licence holder, provided such information does not concern third parties an d is necessary for the carryin g 
out of the proceedings, or is di sclosed to an overseas body 
responsible for the liquidation and bankruptcy of a person holding a licence or an equivalent authorisation from a 
      
VIRTUAL FINANCIAL ASSETS [CAP. 590. 49
European regulatory authority or an overseas regulatory 
authority;
(d) where a summary or collection of the 
information is prepared or supplied in such a way as not to enable the identity of any persons, to whom the information relates to be ascertained;
(e) where the information is disclosed to an auditor 
where such disclosure would assist it in the exercise of his functions under article 50;


Cap. 345.(f) where the information is provided to the Central 
Bank of Malta or to the Listing Authority under the Financial 
Markets Act  in the exercise of their respective functions in 
terms of law;
(g) where the information is provided to such other 
local or European or overseas regulatory, judicial or enforcement authorities in the pursuance of serious concerns of a regulatory or criminal nature:
Provided that the provisions of this article shall not 
prevent the competent authority from exchanging or transmitting  
confidential information belonging to issuers or licence holder s to 
ESAs or the ESRB:
Provided further that the provisions of this article shall 
not prevent the competent authority from using such information  for 
other purposes where the body or p erson communicating informati on 
to the competent author ity consents thereto.
(2) The provisions of this article shall not preclude the 
competent authority from transmitting to the Central Bank of Ma lta, 
the ESCB and the ECB, in their capacity as monetary authorities , 
and, where appropriate, to rec ognised clearing houses or other similar 
body performing clearing or settlement services, and to other p ublic 
authorities responsible for overs eeing payment and settlement 
systems, confidential information intended for the performance of 
their functions. Likewise, the competent authority shall be ent itled to 
the receipt of such information as it may require for the purpo se of 
performing its func tions under the Act.








Cap. 373.(3) Where an officer or an employee of an issuer, VFA agent 
or licence holder has reason to believe that a transaction or a  
proposed transaction could involve money laundering or the fund ing 
of terrorism, he shall act in compliance with the reporting and  other 
obligations set out in the regulations made under article 12 of  t h e  
Prevention of Money Laundering Act  and any procedures and 
guidance issued thereunder, and su ch disclosure shall not const itute a 
breach of confidentiality.
50 [CAP. 590. VIRTUAL FINANCIAL ASSETS
PART X
Miscellaneous Provisions
Exclusion of 
liability.58. (1) The competent authority, including the members 
of the board of administration when acting in any function assi gned 
to the board under any provision of this Act, any body includin g any 
council or committee established by this Act and any member, of ficer 
or employee of that body, the officers and employees of the competent authority and any other person appointed to perform a  
function under this Act, shall not be liable in damages for any thing 
done or omitted to be done in the discharge or purported discha rge of 
any such function or otherwise in the exercise of their officia l duties, 
unless the act or omission is shown to have been done or omitte d to 
be done, as the cas e may be, through wilful misconduct.
(2) For the purposes of this provision "this Act" shall 
include any other Act administered by the competent authority a nd 
any regulations made or r ules issued thereunder.
Notices, etc. 59. A notice or other document to be given or served under 
this Act, or any rules issued or regulations made thereunder, s hall be 
deemed to have been duly given  or served on a person if -
(a) it has been delivered to it; or
(b) it has been left at the address furnished by it to 
the competent authority, or to his last known address; or
(c) if it has been sent to it by post or by telefax at 
any of the aforesaid addresses; or
(d) in the case of a body of persons, whether 
corporate or unincorporate, if it has been given or served in any of the manners aforesaid t o or on a secretary, clerk, 
manager or their equivalent, or to any member of the board of administration or an a ppointed representative.
European right. 60. Where a licence holder wishes to carry on the respective 
activities in a Member State or EEA State, in exercise of a Eur opean 
right, such right shall be subject to - 
(a) a prior notification to the competent authority in 
accordance with regulations mad e and rules issued under this 
Act; and
      
VIRTUAL FINANCIAL ASSETS [CAP. 590. 51
(b) the laws of that Memb er State or EEA State.
Co-operation with 
ESAs and other 
European, overseas and national 
regulatory 
authorities.61. The competent authority shall cooperate with the ESAs 
and other European, overseas and national regulatory authoritie s 
whenever necessary and in accordance with any applicable Europe an 
o r  M a l t e s e  l a w  o r  M a l t a ’ s  i n t e r national commitments, as the cas e 
may be.
PART XI
Transitory Provisions
Transitory 
provisions.62. (1) Any person who, on the date of the coming into 
force of this Act -
(a) is undertaking an activity in terms of article 3 
shall, within three months from the date of coming into force of this Act, draw up a whitepaper and register it with the competent authority in ter ms of the said article:
Provided that this paragraph shall be applicable 
only to those persons who have commenced an offering or have applied for admission to trading in terms of article 3 by not 
earlier than two weeks prior to the coming into force of this A ct;
(b) is providing the services of a VFA agent within 
the meaning found under this Act, shall, within one month from the date of coming into force of this Act, apply to the competent authority for registration in terms of article 7;
(c) is providing a VFA service within the meaning 
found under this Act shall, within twelve months from the date of coming into force of this Act, apply to the competent authority for licence in terms of article 14.
(2) A person under sub-article (1) may, subject to a prior 
notification to the competent authority of the activity it is u ndertaking 
and, or service or services it is providing, immediately upon t he 
coming into force of this Act, continue to undertake such activity or 
provide such service or services in or from within Malta until the 
whitepaper has been registered w ith, or the application has bee n 
determined by, the competent authority and, in so doing, is not  to be 
regarded as carrying on such activity or providing such service  i n  
contravention of this Act.
52 [CAP. 590. VIRTUAL FINANCIAL ASSETS
FIRST SCHEDULE
(Article 2)
Matters to be specified in a whit epaper of an issuer and requir ements
for its approval and publication
General principles
1. The whitepaper shall contain the information which, 
a c c o r d i n g  t o  t h e  p a r t i c u l a r  n a t u r e  o f  t h e  i s s u e r  a n d  o f  t h e  v i r tual 
financial assets offered to the public, is necessary to enable investors 
to make an informed assessment o f the prospects of the issuer, the 
proposed project and of the features of the virtual financial a sset. 
This information shall be present ed in an easily analysable and  
comprehensible form.
2. Certain information specified in this Schedule may be 
omitted from the whitepaper if:
(a) disclosure of such information would be 
contrary to the public interest;
(b) disclosure of such information would be 
seriously detrimental to the issuer, provided that the omission  
would not be likely to mislead the public with regard to facts and circumstances essential for an informed assessment of the prospects of the issuer, the pro posed project and of the featur es 
of the virtual financial assets to which the whitepaper relates ;
(c) such information is of minor importance only for 
a specific offer and is not information that will influence an informed assessment of the prospects of the issuer, the proposed project and of the featur es of the virtual financial 
assets to which the wh itepaper relates; or
(d) disclosure of such information is found to be 
inappropriate to the issuer’s sphere of activity or proposed activity, as the case may be, or its legal form or to the virtu al 
financial assets being offered,  in which case the whitepaper 
shall contain equivalent information when available.
3. The whitepaper shall be drafted in the English language 
and any or no additi onal languages, at the issuer’s discretion.
Summary
      
VIRTUAL FINANCIAL ASSETS [CAP. 590. 53
4. (1) The whitepaper shall include a summary. The 
summary shall, in brief and non-technical language, provide key  
information in relation to the offering. The format and content  of the 
summary of the whitepaper shall provide, in conjunction with th e 
whitepaper, appropriate information about essential elements of  the 
virtual financial assets concerned in order to aid investors wh en 
considering whether to invest in such virtual financial assets.  T h e  
summary shall be drawn up in a common format in order to facili tate 
comparability of the summaries of similar virtual financial ass ets and 
its content should convey the key information of the virtual fi nancial 
assets concerned in order to aid investors when considering whe ther 
t o  i n v e s t  i n  s u c h  v i r t u a l  f i n a n c i a l  a s s e t s .  T h e  s u m m a r y  s h a l l  a lso 
include a warning that:
(a) it should be read as an introduction to the 
whitepaper;
(b) any decision to invest in the virtual financial 
assets should be based on consideration of the whitepaper as a whole by the investor;
( c ) t h e  o f f e r i n g  o f  v i r t u a l  f i n a n c i a l  a s s e t s  d o e s  n o t  
constitute an offer or solicitation to sell financial instrumen ts 
and that any such offer or solicitation of financial instrument s 
will be made only by means of a prospectus or other offering documentation in terms of a ny applicable Maltese law;
(d) without prejudice to article 10 of this Act, civil 
liability attaches to those pe rsons who have tabled the 
summary including any translation thereof, and applied for its notification.
(2) For the purposes of this paragraph "key information" 
means essential and appropriately  structured information which is to 
be provided to investors with a view to enabling them to unders tand 
the nature and the risks of the proposed project, the issuer an d the 
virtual financial assets that are being offered to them. 
Specific matters to be included
5. Paragraphs 6 to 13 of this Sc hedule contain the specific 
matters to be included in a whitepaper.
The persons responsible  for the whitepaper
6. Names, functions and decl arations by the persons 
responsible for the whitepaper that to the best of their knowle dge the 
information contained in the whitepaper is in accordance with t he 
facts and that the whitepaper makes no omission likely to affec t its 
import.
54 [CAP. 590. VIRTUAL FINANCIAL ASSETS
The offer to the public
7. At least, and to the extent it is applicable, the following 
information on the offer shall be provided in the whitepaper:
(a) description of the reason behind the initial 
virtual financial asset offering;
(b) detailed technical description of the protocol, 
platform and, or application, as the case may be, and the associated benefits;
(c) detailed description of the sustainability and 
scalability of the proposed project;
(d) associated challenges and risks as well as 
mitigating measures thereof;
(e) detailed description of the characteristics and 
functionality of the virtual fina ncial assets being offered;
(f) detailed description of the issuer, VFA agent, 
development team, advisors and  a n y  o t h e r  s e r v i c e  p r o v i d e r s  
that may be deployed for the realisation of the project;
(g) detailed description of the issuer’s wallet/s used;
(h) description of the security safeguards against 
cyber threats to the underlying  protocol, to any off-chain 
activities and to any walle ts used by the issuer;
(i) detailed description of the life cycle of the initial 
virtual financial asset offeri ng and the proposed project;
(j) detailed description of the past and future 
milestones and project financing;
(k) detailed description of the targeted investor base;
(l) exchange rate of the virtual financial assets;
(m) description of the underlying protocol’s 
interoperability with other protocols;
(n) description of the manner funds raised through 
the initial virtual financial as set offering will be allocated;
(o) the amount and purpose of the issue;
(p) the total number of virtual financial assets to be 
issued and their features;
(q) the distribution of virtual financial assets;
      
VIRTUAL FINANCIAL ASSETS [CAP. 590. 55
(r) the consensus algor ithm, where applicable;
(s) incentive mechanism to secure any transactions, 
transaction and/or any other applicable fees;
(t) in the case of a new protocol, the estimated 
speed of transactions;
(u) any applicable taxes;
(v) any set soft cap and hard cap for the offering;
(w) the period during wh ich the offer is open;
(x) any person underwriting or guaranteeing the 
offer;
(y) any restrictions on the free transferability of the 
virtual financial assets being of fered and the DLT exchange/s 
on which they may be traded, to the extent known by the issuer;
(z) methods of payment;
(aa) specific notice that investors participating in the 
initial virtual financial asset offering will be able to get th eir 
contribution back if the soft cap is not reached at the end of the 
offering and detailed description of the refund mechanism, including the expected time-line of when such refund will be completed;
(ab) detailed description of t he risks associated with 
the virtual financial assets  and the investment therein;
(ac) the procedure for the exercise of any right of 
pre-emption;
(ad) detailed description of the smart contract/s, if 
any, deployed including inter alia  the adopted standards, its/
their underlying protocol/s, functionality/-ies and associated operational costs;
(ae) if any smart contract/s is/are deployed by the 
issuer, details of the auditor who performed an audit on it/them;
(af) description of any restrictions embedded in the 
smart contract/s deployed, if any, including inter alia  any 
investment and/or geogr aphical restrictions;
(ag) the programme agents used to obtain data and 
verify occurrences from smar t contracts (also known as 
56 [CAP. 590. VIRTUAL FINANCIAL ASSETS
‘oracles’) used and detailed desc ription of their characteristi cs 
and functionality thereof;
(ah) bonuses applicable to early investors including 
inter alia  discounted purchase price fo r virtual financial assets;
(ai) the period during which voluntary withdrawals 
are permitted by the smart contract, if any;
(aj) description of the issue r’s adopted white-listing 
and anti-money laundering and counter financing of terrorism procedures in terms of the Prevention of Money Laundering Act and any regulations made and rules issued thereunder;
(ak) intellectual property rights associated with the 
offering and protection thereof; and
(al) the methods of and time-limits for delivery of 
the virtual financial assets:
Provided that the competent authority shall have the 
power to waive or modify any of t he above requirements within t he 
context of a particular initial VFA offering or a particular ap plication 
for admission to trading on a DLT exchange, as the case may be.
Details of the issuer
8. The following details of the issuer:
- Name;
- Registered address and registration number;
- Date of registration;
- The issuer’s object(s);
- Where applicable, the group of undertakings to 
which the issuer belongs;
- I n  s o  f a r  a s  t h e y  a r e  k n o w n ,  i n d i c a t i o n  o f  t h e  
members who directly or indirectly exercise or could exercise a determining role in the issuer’s administration.
The issuer’s principal activities
9. Description of the issuer’s principal activities including 
the disclosure of any legal pro ceedings having an important eff ect on 
the issuer’s financial position.
The issuer’s board of administration
10. Names, addresses and fu nctions of administrators.
      
VIRTUAL FINANCIAL ASSETS [CAP. 590. 57
Benefits for third partie s and other expenditure
11. The amount or estimated amount of preliminary 
expenses and the persons by whom  any of those expenses have bee n 
paid or are payable, and the amount or estimated amount of the expenses of the issue and the persons by whom any of those expe nses 
have been paid or are pa yable, in whatever form.
Issuer’s financial track record
12. Where the issuer has been established for a period 
exceeding three years, details of its financial track record.
Validity of a whitepaper, arrangements for approval and 
publication of a whitepaper.
13. A whitepaper shall be valid for 6 months after its 
approval by the competent authority for offers to the public.
14. (1) The competent authority shall not register a 
whitepaper unless it is satisfied  that the whitepaper has been drawn 
up in accordance with the provisions of this Act, this Schedule  and 
any regulations, rules or guidanc e made or issued thereunder.
(2) The competent authority shall notify the issuer or the 
VFA agent, as the case may be, o f its decision regarding the ap proval 
or otherwise of the whitepaper.
Significant new factors, material mistakes or inaccuracies
15. (1) Every significant new factor, material mistake or 
inaccuracy relating to the information included in the whitepap er 
which is capable of affecting the assessment of the virtual fin ancial 
assets and which arises or is noted between the time when the whitepaper is approved and the final closing of the offer to th e public, 
whichever occurs later, shall be  mentioned in a supplement appe nded 
to the whitepaper. Such a supplement shall be approved in the s ame 
way and published in accordance w ith at least the same arrangem ents 
as were applied when the origina l whitepaper was published. The  
summary, and any translations thereof, shall also be supplement ed, if 
necessary, to take into account the new information included in  the 
supplement.
(2) Investors who have already agreed to purchase or 
subscribe for the virtual financ ial assets before the supplemen t is 
published shall have the right to withdraw their acceptance wit hin 
two working days after the publication of the supplement, provi ded 
that the new factor, mistake or inaccuracy referred to in parag raph (1) 
arose before the final closing of the offer to the public and t he 
delivery of the virtual financial assets. That period may be ex tended 
by the issuer in which case the smart contract, if any, shall b e updated 
58 [CAP. 590. VIRTUAL FINANCIAL ASSETS
accordingly. The final date of the right of withdrawal shall be  stated 
in the supplement.
Amended by: 
L.N. 106 of 2021.SECOND SCHEDULE
(Article 2)
VFA services
1. Reception and Transmission of Orders
The reception from a person of an order to buy, sell or 
subscribe for virtual financial assets and the transmission of that 
order to a third party for execution.
2. Execution of orders on behalf of other persons
Acting to conclude agreements to buy, sell or subscribe for one  
or more virtual financial asse ts on behalf of other persons.
3. Dealing on own account
Trading against proprietary capital resulting in conclusion of 
transactions in one or more  virtual financial assets.
4. Portfolio Management
Managing or agreeing to manage assets belonging to another 
person if those assets consist of  or include one or more virtua l 
financial assets or the arrangeme nts for their management are s uch 
that the person managing or agree ing to manage those assets has  a 
discretion to invest any of those assets in one or more virtual  
financial assets:
Provided that for the purposes of this paragraph, the term 
"assets" shall exclude any financial instrument, and whether or  not 
issued in Malta.
5. Custodian or Nominee Services
(a) Acting as custodian or nominee holder of a 
virtual financial asset and, or private cryptographic key; or
(b) holding a virtual financial asset and, or private 
cryptographic key as nominee, w here the person acting as 
nominee is so doing on behalf of another person who is providing any VFA service under this Schedule or on behalf of a client of such person, and such nominee holding is carried out in relation to such service.
6. Investment Advice
Giving, offering or agreeing to give, to persons in their 
      
VIRTUAL FINANCIAL ASSETS [CAP. 590. 59
capacity as investors or potential investors or as agent for an  investor 
or potential investor, a persona l recommendation in respect of one or 
more transactions relating to one  or more virtual financial ass ets.
For the purposes of this paragraph, a "personal 
recommendation" shall mean a recommendation presented as suitab le 
for the person to whom it is addr essed, or which is based on a 
consideration of the circumstances of that person, and must con stitute 
a recommendation to take one  of the following steps:
(a) to buy, sell, subscribe for, exchange, redeem or 
hold a particular virtual financial asset;
(b) to exercise or not to exercise any right conferred 
by a particular virtual financial asset to buy, sell, subscribe  for, 
exchange, or redeem it.
A recommendation is not a personal recommendation if it is 
issued exclusively through distri bution channels or to the publ ic.
7. Placing of virtual financial assets
The marketing of newly-issued vi rtual financial assets or of 
virtual financial assets which are already in issue but not adm itted to 
trading on a DLT exchange, to specified persons and which does not 
involve an offer to the public or to existing holders of the is suer’s 
virtual financial assets.
8. The operation of a VFA exchange.
9. Transfer of virtual financial assets
Conducting a transaction on behal f of a third party that moves a 
virtual financial asset from one virtual financial asset addres s or 
account to another.