Are you baffled by the words blockchain and cryptocurrency? Is it really safe? Should you, as a company, be looking into this innovative industry? New legislation has seen Malta become the world’s first blockchain island as we focus on a framework that is regulated while allowing for technological innovation. This new and decentralised digital money system is changing the ways that we make payments, invest, save, and raise capital.
Despite the blockchain and cryptocurrency industry being so young, E&S Group have already amassed valuable experience in the trade, offering clients advice on all matters relating to this new technology as well as ancillary services.
With cryptocurrency fever extending far beyond the cryptocrowd, now is the best time to create your ICO. At E&S, we offer ICO Advisory services to our clients through every stage of development including generation of ideas, timing, market research, registration, issuing of tokens and launching the ICO.
The legal implications of running an Initial Coin Offering (ICO) are present in all your offering documents and material. This is why having legal support is essential for your ICO. Our team is able to assist you from concept stage through to your actual offering.
Correct tokenomics can quite simply make the difference between a successful ICO and one that fails to raise the capital required. Our expertise in token utility, utilisation, supply and demand and distribution in a relatively new market make E&S Group the obvious choice.
Blockchain-based companies have sought the opportunity to help crypto enthusiasts trade their digital currencies worldwide. As a result, it has enabled more motion, shifting more trade to crypto exchange jurisdictions where Malta’s rate of crypto exchange is the highest in the word. We assist clients on matters regarding crypto exchanges including Professional Investor Funds (PIFs) in crypto assets, personal and corporate tax advisory related to acquisitions and disposals of cryptocurrencies and crypto assets as well as licenced trust and escrow arrangements in relation to cryptocurrencies OTC trading.
Blockchain is the latest development in the tech world and soon to become a big part of any business transaction. Simply put, blockchain is a continuously growing list of records, so-called ‘blocks’ which contain data, these blocks are cryptographically interlinked and secured. Blocks cannot be altered or changed without affecting other blocks, which makes them secure and inherently resistant to modification or forgery. Each block is built into the previous one, hence creating a ‘chain’.
Blockchain allows elimination of intermediaries and middlemen while ensuring legitimacy and security of transactions without further validation, therefore making future business transactions efficient and cost-effective, while sustaining the necessary level of transparency and security.
Bitcoin is a new generation digital currency which is likewise based on cryptography, therefore ensures safety and privacy of transactions on a daily basis. Furthermore, another advantage cryptocurrency brings is ease and cost-effectiveness of transactions involving it. Being digital, it is much easier to store and transport than physical cash. Moreover, there are extremely low transactions rates and no applicable exchange rates, which makes the transactions extremely effective.
One’s obvious first question would be regarding the safety and security of such transactions, as well as cryptocurrency itself. Cryptocurrency is not a centralized, government-issued currency under strict monetary controls, but a decentralized, peer-to-peer currency derived from open-source software and built on a trust-based, consensus system – blockchain, which is designed to ensure security and legitimacy of such transactions.
Since Bitcoin started to gain traction worldwide, more ICO and blockchain companies put their coins in tradable assets. Although Bitcoin remains one of the most popular cryptocurrencies, Ethereum and Ripple are close behind.
Blockchain-based companies such as Coinbase, Binance and OKEx has sought the opportunity to help crypto enthusiasts trade their digital currencies worldwide. As a result, it has enabled more motion, shifting more trade to crypto exchange jurisdictions. In a report, conducted by banking giant Morgan Stanley, Malta has the highest rate of crypto exchange per capita, accounting close to $1.2 billion.
Crypto exchanges are defined as online platforms used to exchange cryptocurrencies to altcoins or FIAT currency. The exchange processed depends on the exchange platform and in accordance with the rate calculated. Additionally, crypto exchanges are similar to stock exchanges or currency exchanges of FIAT currencies.
In the future, we will see more digital currencies in circulation. Already. around the world, companies such as Starbucks and other online companies are selling their products, in exchange for Bitcoin. The importance of Bitcoin and other cryptocurrencies is gaining popularity among various stakeholders in the industry. By means of Blockchain technology, this industry has empowered the sector to move forward and gaining momentum to result in a cryptocurrency future. Blockchain is the catalyst, transforming the way we see money.
In the coming days, Malta is awaiting the Virtual Financial Assets Act to become law. When setting up a Crypto fund in Malta, it will be under the Professional Investor Fund (PIF), as stated in the Malta Fund Regulatory Framework.
Malta’s regulatory and supervisory body to financial institutions is the Malta Financial Services Authority (MFSA). Subsequently, this authority authorises and issue licences to investment funds, in accordance with the established schemes and arrangements for Maltese funds. These funds must have, the collective investment of capital acquired by means of an offer of units for subscription, sale or exchange. These funds need to possess any one of the following characteristics:
The risk spreading requirement, however, is not a mandatory requirement to PIFs targeting Qualifying Investors.
Such a VC Fund must target professional investors (as defined by MiFID). They must invest solely in virtual currencies (either directly or indirectly) and need to have assets under management not exceeding €100m in value. In addition, they cannot seek to obtain a European passport to market their units. Each qualified investor also sets a minimum investment of €100k or its equivalent currency in PIF. However, a qualified investor cannot reduce the stated amount of €100k as per Maltese law.
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