A virtual space with real regulation
Bitcoin, Ethereum, DLT – in the past few years, the number of newly-minted terms and acronyms surrounding crypto assets has fuelled curiosity about the potential of easy money, as well as created a huge amount of scepticism. “The simplest definition of crypto assets, or Virtual Financial Assets (VFAs) as they are referred to in Malta – is as a digital representation of value that is stored on Distributed Ledger Technology, or the blockchain, whose access is based on cryptographic keys,” said Herman Ciappara, MFSA’s Head of VFA Function. “VFAs are relatively new – although some of them have been around for a few years, with Bitcoin being the most widely known of such assets. But this is just one VFA out of the estimated 4,000 other crypto assets in existence. “The technological backbone of VFAs – the blockchain – is brilliant and the principles on which this is built are quite amazing. However, like all other technologies it is not risk free.” VFAs transactions are stored on a decentralised infrastructure which does not involve a central authority responsible for its governance. Most coins are not even issued by known persons, unlike legacy currencies which are issued by...