MALTA Law and Practice Contributed by: Ian Gauci and Cherise Abela Grech, GTG Legal
distributed ledger or the validation of transac - tions; • when the offer concerns a utility token provid - ing access to a good or service that exists or is in operation; and • when the holder of the crypto-asset has the right to use it only in exchange for goods and services in a limited network of merchants with contractual arrangements with the offeror. Please see 10.12 Non-Fungible Tokens (NFTs) regarding NFTs. 10.5 Regulation of Blockchain Asset Trading Platforms The VFAA defines a DLT exchange as any trading and/or exchange platform or facility on which any form of DLT asset may be transacted. A DLT asset is any virtual token, VFA, electronic money or financial instrument that is intrinsically dependent on or utilises DLT. The term “VFA exchange” refers to a DLT exchange for VFAs, within which multiple third- party buying and selling interests for VFAs can interact in a manner that results in a contract, by exchanging one VFA for another or a VFA for fiat currency that is legal tender, or vice versa. Therefore, exchanges on which only financial instruments are traded are not licensable in terms of the VFAA but fall within the remit of the ISA. Under MiCA, the operation of a trading platform for crypto-assets is deemed to be a crypto-asset service. This refers to the management of one or more multilateral systems that bring together or facilitate the bringing together of multiple third- party purchasing and selling interests in crypto- assets, in the system and in accordance with its rules, in a way that results in a contract, either
by exchanging crypto-assets for funds or by the exchange of crypto-assets for other crypto- assets. 10.6 Staking Put simply, the term “staking” refers to the pro - cess of immobilising crypto-assets to support the operations of proof-of-stake and similar blockchain consensus mechanisms in exchange for the granting of validator privileges that can generate block rewards. MiCA does not contain specific provisions on staking. Thus, staking is not prohibited, but at the same time it is not subject to specific require - ments or licensing. Where staking services are provided to clients for a consideration by intermediaries that under - take to stake the clients’ crypto-assets on their behalf, the crypto assets – or the private keys giving access to them – are held by the staking service provider in custody. Thus, the provision of staking services is ancillary to custody ser - vices, which are fully regulated under MiCA, and triggers the requirements of a licence. It follows from these obligations that, where stak - ing services are provided in combination with the provision of custody, CASPs should ensure that the assets held on behalf of clients can be returned to the clients in accordance with the custody agreement. CASPs should also remain liable to their clients for any loss of crypto-assets attributable to them. Where staking services are provided in com - bination with any other crypto-asset services, CASPs should obtain the clients’ explicit con - sent to stake their crypto-assets, as it may have an impact on their clients’ ability to access them.
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