Malta’s Registry of Companies to Use Blockchain-Based System

According to local news reported on May 8th, Malta’s Registry of Companies is going to operate on a blockchain-powered system from now.

The Registry of Companies is a public registry holding official information and documentation pertaining to new and existing companies. At the end of last year, the agency established itself as an independent from the Malta Financial Services Authority’s (MFSA).

Now, the registry is seeking out a new method of organizing and documenting their information, as they plan to use a blockchain-based system. The act of demerging from the MFSA and becoming an independent establishment will lead to strengthening the internal management structure of the data.

Silvio Schembri – Secretary of the Parliamentary Secretary for Financial Services, Digital Economy, and Innovation – stated that the use of blockchain technology will provide greater efficiency, while “lessen[ing] unnecessary bureaucratic procedures.”

He further added that the agency will operate on a new system, which will handle all of the processes executed by the Registry of Companies. He noted that with the new system in place, new services will be provided, which was not possible before as this is the first agency in the world to be run on a blockchain based system.

In addition to that, Silvio Schembri has noted that the new premises will form an integral part of Malta’s technological and innovative activity.

“While previous administration disregarded the South of Malta, this administration sought to exploit the potential of this area by bringing commercial activity to the part for the benefit of all,” said the Parliamentary Secretary.

The Registry of Companies will be located in Zejtun together with the International Taxation Unit, Tech.MT Foundation, Finance Malta and Gaming Malta.

Last December, Malta together with seven other southern European Union member states, released a declaration encouraging the use of Distributed Ledger Technology’s (DLT) within the region. The declaration outlines several industries such as education, transport, mobility, shipping, Land Registry, customs, company registry, and healthcare, which can benefit and improve from implementing blockchain technology.

Meanwhile, the International Monetary Fund (IMF) stated that the growth of blockchain in Malta had created significant risks of money laundering and terrorism financing in the island’s economy. Subsequently, the IMF had issued several recommendations to the authorities such as applying more sanctions and gaining a better understanding of possible risks and regulatory breaches that come with blockchain technology.

Despite that, the Prime Minister of Malta has voiced a positive stance regarding the fintech and has argued that there is a potential for corporate, political, and civic systems to benefit from blockchains implementation, adding that it could ultimately solve “decades-old problems.” He further claimed that this potential is what drove the country to “launch itself as a Blockchain Island,” stating that the island became “the first jurisdiction worldwide to regulate [the] technology.”

Malta Hires Cryptocurrency Compliance Company CipherTrace

Reported by local news, the Malta Financial Services Authority (MFSA) has hired US crypto compliance company CipherTrace to help monitor the compliance of all crypto related companies operating in the country.

The MFSA announced on March 11th that it would make use of CipherTrace’s Compliance Monitoring tools to protect consumers, investors and business partners. The startup will be expected to monitor transactions that pass through local crypto exchanges and digital wallets including ICOs, screening for potential money laundering and terrorism financing violations.

In addition to that, CipherTrace uses machine learning to de-anonymize transactions, therefore helping regulators assess and audit the trustworthiness of crypto asset businesses. This tool tracks the risk exposure of virtual asset businesses including cryptocurrency exchanges, collective investment schemes and ICOs to measure potential exposure.

MFSA CEO Joseph Cuschieri has stated that “being strongly aware of the money laundering and financing of terrorism risks associated with entities operating in this sphere, the decision has been taken to engage the services of CipherTrace in order to reduce fraud and detect transactions with illegal sources of funds.”

He further added that the CipherTrace Compliance Monitoring will provide the MFSA with powerful oversight tools to automate regulatory processes and audit the risk management of virtual asset businesses that are licensed in Malta.

CEO of CipherTrace Dave Jevans has also claimed that oftentimes businesses have a difficult time establishing trust and maintaining banking relationships because of their perceived risk and such the tools provided by the company will help financial institutions decide which crypto businesses are safe to work with.

Founded in the US in 2015, CipherTrace has since been actively helping governments make crypto trading safe and trusted. It was originally funded by the US Department of Homeland Security Science and Technology, with the general goal to analyze risk exposure for crypto based companies, such as exchanges or Initial Coin Offerings (ICOs).

Malta has been pursuing the title of “Blockchain Island” as it aims to become a hotspot for blockchain and cryptocurrency. Malta has one of the friendliest and best regulatory framework for crypto and has attracted a lot of major crypto business’ to its shores. In June, the Parliament approved three bills on cryptocurrency and blockchain technology. Binance, OKEx and BitBay are amongst the companies who chose to either relocate or expand to the crypto-friendly island.

If this new partnership between the MFSA and CipherTrace goes well, this could be another step towards Malta becoming the “blockchain island” it seems so eager to be.

Prime Minister of Malta Outlines Blockchain Impact on the Future of Money at UN Assembly

At the 73rd session of the UN General Assembly (UNGA), Joseph Muscat, Prime Minister of Malta has delivered his speech on the future of blockchain technology especially in Malta, citing that cryptocurrency will without a doubt become the future of money. The Prime Minister has also asserted that with the rapidly growing and promising industry of blockchain technology, Malta has determined to openly embrace the crypto market and businesses within it, leading the global cryptocurrency sector with favorable regulations and practical policies.

In his statement, he commented on how technology is always at the front of radical changes:

“I passionately believe technology revolutionizes and improves systems. This is why in Malta, we have launched ourselves as the blockchain island. By being the first jurisdiction worldwide to regulate this new technology that previously existed in a legal vacuum. Blockchain makes cryptocurrencies inevitable future of money. More transparent it helps filter good business from bad business.”

In his speech, Prime Minister Muscat further stated that the local government remains passionate about the potential of the blockchain and its ability to eliminate third party service providers to give users complete freedom over information and money. Muscat indicated that the blockchain will eventually generate solutions that can replace existing infrastructure in major industries like healthcare and charity.

“Blockchain can provide solutions to health care systems where patients have real ownership of their medical records. Emissions trading systems can be taken to the next level. We can help verify that humanitarian assistance is reaching its intent destination. We can make sure that nobody is deprived of their legitimate property because of compromised data.”

Since the beginning of the year, Malta has put all of its focus on building and developing an appropriate environment that significantly improves the businesses of crypto and blockchain-based companies.

Malta’s ambitious efforts are gradually coming to fruition, as Binance, the world’s largest cryptocurrency exchange with around 10 million users and $200 million in quarterly profit, relocated its headquarters to the island.

In March of this year, Binance CEO Changpeng Zhao affirmed his plans of investing in Malta and its local cryptocurrency market in order to help the expansion and growth of the blockchain industry within the region, citing that:

“After reviewing a proposal bill, we are convinced that Malta will be the next hotbed for innovative blockchain companies and a centre of the blockchain ecosystem in Europe. Binance is committed to lending our expertise to help shape a healthy regulatory framework as well as providing funds for other blockchain start-ups to grow the industry further in Malta.” 

Soon after the relocation of Binance to Malta, Tron, another billion dollar Beijing based blockchain company, revealed its intent to set up an office in the Malta as well and invest in the local cryptocurrency market, as it had been moved by the progressive approach and  the favourable policies of the government.

Within such a short period of time, the ambitious plan of Malta to become a leading region in the global cryptocurrency and blockchain industry enabled the country’s rapid growth of the economy, solidifying their place at the forefront of blockchain development.

The success of Malta’s grand plans for the future has sparked even more interest as three major cities of South Korea- Seoul, Busan, and Jeju Island, have announced their intent to simulate the success of Malta, aiming to become a leading force within the local cryptocurrency market.