Malta's MiCA Fast Track Sparks Regulatory Controversy

The EU's regulatory framework for crypto assets, MiCA, came into effect after (, and Malta quickly became a popular choice for crypto companies looking to establish themselves in Europe. This small southern European country offers a fast track to the MiCA system through the Virtual Financial Assets Act established in 2018. However, this rapid approval process has raised industry concerns about the rigor of regulation.

The Malta Financial Services Authority stated that a mature local regulatory framework can expedite the MiCA approval process for existing businesses. According to the regulations, companies holding a VFA license before December 30, 2024, can benefit from the MiCA fast track and pre-authorization eligibility. This policy has attracted several crypto giants, including OKEx and Crypto.com.

However, this rapid approval model has raised regulatory concerns. Liat Shetret, Vice President of Elliptic, questioned whether small jurisdictions have the corresponding law enforcement capabilities and emphasized the importance of continuous regulatory mechanisms and specialized law enforcement teams. The CEO of a Polish exchange bluntly stated that MiCA approvals should not be as casual as fast food.

French regulators have also expressed concern, warning of the risks of a "fast-food" approval process. The chairman of the French Financial Markets Authority has called for enhanced coordination with the European Securities and Markets Authority )ESMA( to prevent companies from opting for the loosest approval locations.

This regulatory discrepancy leads to a clear preference among companies. In contrast, France has only approved 3 crypto asset service providers )CASP(, and its strict standards have even caused some large exchanges to abandon the market.

EU regulators are currently conducting a review of Malta. Reports indicate that ESMA has initiated a "peer review" of a member state with relatively relaxed regulations. This reflects the fundamental contradiction the EU faces in implementing MiCA: how to balance regulatory centralization with member state autonomy.

Apart from regulatory disputes, Malta has recently encountered judicial conflicts with the European Commission over its "Investment Citizenship Program." The European Court of Justice ruled that the country's "Golden Visa" program, which sells EU citizenship to investors, is illegal. Although this is not directly related to crypto regulation, it reflects the country's similar strategies to attract wealthy individuals and crypto giants.

Industry experts point out that there are arbitrage opportunities within the European regulatory system, and companies tend to choose countries with more lenient approvals. This phenomenon highlights the challenges faced by the EU in establishing a unified and effective cryptocurrency regulatory framework. With the implementation of MiCA, how to strike a balance between promoting innovation and ensuring regulatory rigor will be a key issue for EU cryptocurrency regulation.