Malta financial regulator plans to monitor crypto businesses

The Malta Financial Services Authority (MFSA) announced its intention to “actively monitor” licensed cryptocurrency businesses in the country in a bid to prevent money laundering.

The announcement was made through a three-year strategic plan for 2019-2021 published on September 6. In the document, the financial authority stated that it would modernize its regulatory approach by using technology and other regulatory bodies. MFSA said:

We will continue to work closely with the FIAU [Financial Intelligence Analysis Unit] and other national and international authorities, including the newly set-up Malta Digital Innovation Authority (MDIA).

The published plan outlines MSFA supervising priorities and key areas the body plans to address. In addition to money laundering, MFSA will also address terrorist financing in relation to cryptocurrencies. The report read:

Whilst Malta has taken unprecedented steps in bringing blockchain and crypto technology into the regulatory fold. We understand that such innovations present challenges in the prevention of money laundering and terrorist financing.

The regulatory body will also expect businesses within this space to take a technology-driven approach to regulatory compliance. Among the expected changes will be the implementation of REchTech, which includes automation and artificial intelligence.

As per the published document, MFSA is in the process of implementing SupTeh intelligence tools. The authority plans to use these tools to monitor and manage business risks related to cryptocurrency businesses. The documents further read:

This will better position the MFSA to identify fraud, prevent money laundering, and the funding of terrorism and protect consumers, investors, and market stakeholders. The implementation of SupTech intelligence tools 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.

MSFA will also reportedly, check to ensure these businesses meet their obligations for MiFID II. In addition, they will also implement the National Product Intervention Measures taken during 2019.

Currently, Malta is among the leading countries in Europe for cryptocurrency and blockchain activities. Last month, the government in Malta announced its plans to run a new government department powered by blockchain. The department dubbed as Malta Business Registry (MBR) would be run with the help of artificial intelligence.

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