On Thursday, Tokenomica announced it has become “one of the first cryptocurrency platforms to receive an in-principle approval for a Class 4 VFA Licence from the Malta Financial Services Authority” (MFSA).

An in-principle approval can be described as the MFSA providing a preliminary ‘green light’ until some final details are ironed out.

According to BCA Solutions, a Malta-based company engaged in providing technical guidance by experienced specialists in cryptocurrency and DLTs, and which guided Tokenomica through its licensing journey, “this milestone is a major achievement for the crypto company on its mission to reinvent crypto investment and be fully in compliance with global regulations”.

Class 4 Licence holders, which is the MFSA’s most comprehensive licence and is used for VFA exchanges, are authorised to provide any VFA service, such as:

Reception and Transmission of orders; Execution of orders on behalf of other persons; Dealing on own account; Portfolio management; Custodian or Nominee Services; Investment Advice; Placing of VFAs; and the operation of a VFA exchange

BCA Solutions explained that the in-principle approval shall be valid for three months, within which applicants may finalize outstanding issues raised, satisfy pre-licensing conditions and submit original copies of any outstanding documentation

Tokenomica, guided by the experts at BCA Solutions, will continue working on the licensing process, aiming to become a fully licensed exchange in Malta.

Jonathan Galea, CEO of BCA Solutions

Speaking to BCA Solutions CEO, Jonathan Galea, about the efforts behind supporting Tokenomica, he remarked that these kinds of licences are to be treated on par with licence applications for financial service providers.

“At first, Malta was criticised for taking this approach, but now other countries, such as Germany and France, are also adopting similar models.

“In fact, the European Commission had issued proposals for EU-wide regulations, which seeks to regulate VFA service providers in a similar way to Malta.”

He noted that while Malta was criticised for treating VFA service provider licencing as seriously as those of financial service providers, many have started to see the wisdom.

Last week, newly appointed Finance Minister Clyde Caruana poured cold water on Malta’s Blockchain Island dreams, by saying that without traditional banks on board, the dream was a non-starter.

Asked about a reaction to this, Mr Galea stressed that he never agreed with the term Blockchain Island, and that, ultimately, Dr Caruana’s comments are correct.

He did add, however, that the MFSA side-stepped this issue by allowing applicants to hold fiat currency with e-money institutions, payment institutions and banking institutions – which do not have to be located in Malta, but they must be located in a reputable jurisdiction.

Mr Galea described the banking situation locally as sad, saying globally, big banks like JP Morgen and others are starting to allow certain investment by their clients in bitcoin, and are also working on allowing cryptocurrency deposits into their accounts.

“It seems that the banking industry is starting to warm up to crypto and related fields, but locally they have remained quite conservative.”


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