A mission from the International Monetary Fund, or IMF, claims that the growth of Cryptocurrency in Malta has created significant risks of money laundering and terrorist financing in the island’s economy.
Blockchain was highlighted along with financial and remote gaming sectors and the demand for citizenship-by-investment scheme, as posing threats to anti-money-laundering efforts. The IMF called on the Maltese authorities to ensure that cryptocurrency institutions fulfilled their anti- money-laundering demands.
IMF Insists Authorities Improve Their Understanding Of Cryptocurrency Risks
The IMF mission insisted that the authorities improve their understanding of cryptocurrency risks in Malta and ensure that sanctions are applied where necessary, however, they did commend efforts by the Financial Intelligence Analysis Unit to implement their 50-point action plan. They also raised concerns about the effectiveness of financial supervision efforts, pointing to capacity constraints and deficiencies in the regulatory framework.
“The increasing number of financial entities under supervision, the rapid development of new products, the evolving regulatory environment and the tightening of the labour market have put the Malta Financial Services Authority under considerable strain”, it said.
The prime minister of Malta, Joseph Muscat, has endorsed cryptocurrency as being the inevitable future of money and has made a strong case for the transformative impact of the technologies across political, civic and corporate applications.
Three Cryptocurrency Bills Passed By Maltese Government
The Maltese parliament has passed three blockchain and crypto related bills in order to spearhead innovation and establish a robust and transparent crypto regulatory climate: the Technology Arrangements and Service Providers (TAS) Bill, the Virtual Currencies (VC) Bill, and the Malta Digital Innovation Authority Bill (MDIA).
This proactive position is why Malta is known as the “blockchain island”.
Cryptocurrencies continue to occupy a conspicuous place in Maltese political life, recently even providing fuel for an opposition leader to criticize the government for its silence regarding the crypto downtrend.
The IMF visit in Malta was part of a regular consultation requirements and included meetings with the authorities and private sector operators, not just about cryptocurrency.