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Bailey McCann, Opalesque New York:

The Malta Financial Services Authority has released a new consultation paper on cryptocurrency. The regulator has considered early feedback on the development of cryptocurrency and is considering both how to support the development of cryptocurrency technology and the investment in these technologies. In addition to the paper, the regulator has announced an extended comment period for industry feedback.

Malta's FSA appears to be taking the stance that the current rules for professional investor funds (PIFs) will also hold for those funds that invest in cryptocurrency. Funds that invest in bitcoin and other crypto assets will likely be given a supplemental license based on what is in the paper.

In addition to how funds are licensed the regulator is considering how to handle entities that issue their own virtual tokens as part of an ICO offering.

Proposed investment structures for all crypto funds are limited to SICAV and INVCO structures, which are required to have a board of directors responsible for the overall conduct of business of the collective investment scheme. Early industry feedback suggests that these structures can best handle any legal challenges and investor concerns. Unit trusts may also be applicable for investment managers considering investments in crypto assets.

In the paper, the regulator is quick to point out that the development of these assets is relatively recent and requires further review. ......................

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