Launching an ICO from Malta


19 Dec 2018

The 1st of November of 2018 marked an important date for the regulations of ICOs in Malta since the new Virtual Financial Assets Act (Cap. 590 of the Laws of Malta) (the “Act”) as well as the Virtual Financial Assets Regulations (S.L. 590.01) (the “Regulations”) came into force. The Act and the Regulations deal with offerings and all services relating to coins and tokens that qualify as Virtual Financial Assets (the “VFAs”).

Something interesting to note here is that by merely offering profit sharing to token holders, it does not mean that the token necessarily qualifies as a security in terms of Maltese law. Therefore, a token that grants holders the right to profit sharing can still qualify as a VFA in terms of the Financial Instrument Test (the “FIT”) published by the MFSA.

The laws require any issuer that offers a VFA to the public in or from within Malta or that applies for the VFAs admission to trading on an exchange (anywhere in the world), to draw up a whitepaper compliant with the requirements established by the Act and register it with the Malta Financial Services Authority (MFSA) through a VFA Agent. VFA offerings that commenced before the 18 of October 2018 and that are completed by 31 January 2019 are exempt.

If you are offering a VFA in or from Malta, you should keep these key rules in mind:

- An entity making a VFA offering needs to have at least 2 Directors or Partners, as the case may be;

- It cannot publish a whitepaper before the lapse of 10 working days from when it is submitted to the MFSA;

- The entity must commence its offering within 6 months from when the whitepaper is registered;

- On an annual basis draw up and submit to the MFSA a certificate of compliance;

- Abide by AML/CFT rules;

- Accept not more than the equivalent of Eur 5,000 per year from persons that do not qualify as experienced investors;

- Appoint and have at all times appointed a System Auditor, a VFA Agent, a Custodian, a financial Auditor and an MLRO;

For a person to be deemed an experienced investor, he/she shall declare to the Issuer that: (1) he/she is capable of providing evidence that he has already participated in other Initial Virtual Financial Asset Offerings and his initial investment exceeded EUR 10,000 or its equivalent; (2) he/she is aware of the risks involved; and (3)the funds he/she is contributing to the specific Initial Virtual Financial Asset Offerings does not exceed one per cent of his net worth excluding his/her main residential home.

Issuers that started their ICO on or after the 18 October 2018 and that have notified the MFSA that they wish to benefit from the transitory provisions in terms of Article 62 of the Act shall terminate their public offering by 31 January 2019 or register their whitepaper as explained above by that date.

If you have any queries, we are happy to assist you. Kindly drop us an email at

This article does not constitute legal advice and does not establish an attorney relationship. If you require legal advice, please contact me on or one of my colleagues who helped me with this article and with all blockchain related work at WH Partners at