Bartolo Clayton, Malta’s newly appointed Parliamentary Secretary for Financial Resources, expressed his country’s interest in blockchain technology.

Clayton clarified the government’s status towards the major crypto exchange Binance, saying:

“Binance has never been in possession of an official license by MFSA. Such statement has been further corroborated by Changpeng Zhao, CEO of Binance, on his personal Twitter account where he also stated that Malta has not changed its position.”

“This, therefore, DOES NOT mean that the Government has in some way or another introduced a harsher or more stringent stance towards cryptos, but merely an authority stating facts,” he added.

Last week, Malta’s Malta Financial Services Authority (MFSA) introduced an unprecedented statement. The market regulator stated that Binance is not licensed to operate in the country although the firm has strong relations with local authorities.

Although the regulator has not yet licensed any crypto firm, the statement indicates a breakdown of ties between the cryptocurrency sector and Maltese officials who pretend to operate a “blockchain island.”

The shift in mood may be due to Maltese Prime Minister Joseph Muscat’s recent registration. However, it seems as if the local cryptocurrency sector has started to face problems well before that. The new government has even affirmed its plans to act as a blockchain island.

During his speech to the UN General Assembly in September 2018, Muscat ambitiously described his country as a blockchain island. Nonetheless, the Maltese government passed three crypto-related bills almost two months before the announcement, promising to create a clear and open regulatory climate.

Although countries like such as Canada, Japan, and Belarus had by that time enacted crypto legislations, Malta’s transformation to a blockchain island was unprecedentedly swift.

Slow laws do not work well with fast market

The most significant aspect of the Maltese blockchain regulations, especially the Virtual Financial Asset Act, is that it allows firms to be approved by MFSA when performing initial coin offerings, selling cryptocurrencies, or providing online wallets and brokerage services.

However, no companies have yet been approved under the VFA Act, given the fact that it has been more than a year since it was decreed.

Sammut, founder of ICO Launch Malta, said:

“It’s certainly disappointing for the hundreds of businesses attracted to the country on promises of a nice, accommodating regulatory climate.”

He added:

“My impression is that the government at the time prioritised primacy to market ahead of operational readiness. Subsequently, what initially started off as an understandable desire to ‘get things right’ and not put the country’s reputation at risk in the event of a scandal, seems to have devolved into the double whammy of an absolute overkill of a regulatory package, along with a total operational complacency in issuing actual licences.”

Earlier, Cryptolydian reported MFSA as claiming that major cryptocurrency exchange Binance has never been approved to operate in the country.

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