Last week, the financial watchdog of Malta came forward with an unexpected statement. Apparently, Binance, a leading cryptocurrency exchange that had been enjoying a close relationship with local authorities, is not authorized “to operate in the crypto currency sphere,” as the regulator’s press release stressed.
While the Malta Financial Services Authority has yet to license any cryptocurrency business — and not just Binance — under the country’s widely marketed cryptocurrency framework, the statement signifies a deterioration in relations between the cryptocurrency sector and Maltese officials, who have claimed to run a “blockchain island.”
While the change of tone could be attributed to the recent resignation of Maltese Prime Minister Joseph Muscat and the subsequent arrival of his successor, it seems like the local cryptocurrency industry had started to experience difficulties even before that. Nevertheless, in a comment to Cointelegraph, the new government has reiterated its plans to operate as a blockchain island.
Inside Malta’s grand plan
In September 2018, then-Prime Minister Muscat ambitiously presented his country as a blockchain island during his speech at the United Nations General Assembly. Indeed, about two months prior to the announcement, the Maltese government had approved three crypto-related bills, aiming to establish a strong and transparent regulatory climate: namely, the Digital Innovation Authority Act, the Innovative Technological Arrangement and Services Act, and the Virtual Financial Asset Act.
Although nations like Canada, Japan and Belarus had already enacted cryptocurrency-specific laws by that time, Malta’s transition toward becoming a blockchain island was unprecedentedly rapid. The term itself was coined in April 2018 when Silvio Schembri, the current minister of economy, investment and small business, commented to Cointelegraph on the news about Binance, the world’s top exchange, potentially moving to Malta…