Authors: Ian Allison, Camomile Shumba
Translation: LenaXin, ChainCatcher
Key points
The regulatory framework launched by Malta in 2018 allows companies to easily transition to the MiCA system, but there are concerns about whether its licensing is too lenient.
The CEO of Poland's largest cryptocurrency exchange stated, 'Obtaining a MiCA license should not be as simple as ordering at McDonald's.'
A month before OKEx paid $500 million to settle compliance issues with the US Department of Justice, Malta's financial regulator had granted it MiCA pre-authorization.
The southern European island nation of Malta, with a population of 500,000, is becoming the preferred location for crypto giants to establish a foothold in Europe. Just weeks after MiCA came into effect, the country issued licenses to major exchanges like OKEx—licensed companies can operate across 30 countries in the economic zone.
Recent developments show that the Gemmi exchange has also joined the ranks of those applying for a Maltese license.
Malta's rapid implementation of MiCA has sparked controversy. Although the CASP rules pursue unified European standards, there is room for autonomy in the approval processes of different countries. The industry questions whether Malta's due diligence is sufficient and whether approvals are overly rushed.
Malta's 'fast track' for MiCA approvals
The Virtual Financial Assets Act (VFA) launched by Malta in 2018 laid the foundation for its transition to the MiCA system, officially recognized as 'essentially equivalent to MiCA.'
The framework specifies that companies holding VFA licenses before December 30, 2024, can enjoy the MiCA fast track and pre-authorization.
Regulators state that a mature domestic system can accelerate approvals for existing companies.
Regulatory concerns
Malta's rapid adaptation to regulatory changes provides convenience for companies, but raises questions about the substance of its regulation.
Liat Shetret, vice president of Elliptic, pointed out, 'Small jurisdictions can indeed adapt more quickly to regulatory changes,' but questioned whether rapid approvals are backed by corresponding enforcement capabilities. She emphasized, 'Attracting investment and accelerating licensing is easy, but a sustainable regulatory mechanism and a professional crypto enforcement team are key.'
But local crypto practitioners pointed out that Malta's familiarity with digital asset regulation is its core competitive advantage.
Ian Guaci, a partner at the Maltese law firm GTG, noted, 'Companies need coherent and professional regulation, but countries newly implementing MiCA may not possess this capability.'
The CEO of Poland's largest exchange Zondacrypto, Przemysław Kral, used the analogy of 'fast food vs. Michelin restaurants' to explain why he abandoned Malta for the more stringent regulations of Estonia.
He stated, 'MiCA approvals should not be as casual as ordering fast food; the case of OKEx being approved in four days illustrates the problem.' (Note: OKEx obtained pre-authorization on January 23, 2025, and received formal licensing just four days later on January 27.)
Crypto giants bet on Malta
Major exchanges like OKEx obtained MiCA pre-authorization through rapid approvals in Malta. However, a month later, the company paid $500 million to settle with the US Department of Justice over allegations of operating without a license. Malta's regulators also fined it $1.2 million in April for violating anti-money laundering regulations.
Malta's regulators responded that they adopted a risk-based approval principle, emphasizing 'prudent assessment based on the information available at the time, balancing efficiency and risk.' OKEx stated that it has been operating in Malta since 2018 and held a VFA license when applying for MiCA in 2023.
Erald Ghoos, CEO of OKEx Europe, recently explained the choice of Malta on the X platform: 'We ultimately chose Malta because its overall licensed product layout is more advanced.' He revealed that the company had also explored the French and Dutch markets.
Ghoos emphasized, 'OKEx did not receive any special treatment from the Malta Financial Services Authority; the opposite is true.'
Another crypto giant, Crypto.com, also obtained a MiCA license in Malta this January. Although the platform is licensed in multiple countries such as Dubai, it was fined €2.85 million in 2023 for operating without a license in the Netherlands. The company stated that its Maltese headquarters has been operational for five years.
France's counterattack
French regulators warn of the risk of 'fast-food' approvals in MiCA. The chairman of AMF pointed out that some rapidly approved products may lower regulatory standards, calling for strengthened coordination from ESMA to prevent companies from choosing the loosest approval locations.
There are transparency issues in the authorization process of MiCA, with significant differences in approval standards among member states. Although ESMA and EBA have established coordination mechanisms, actual implementation remains inconsistent.
French blockchain expert Arroche pointed out, 'France's AMF strictly adheres to ESMA standards, while countries like Malta issue licenses even when technical details are incomplete, even creating a 'pre-approval' process that is not authorized by MiCA.'
These regulatory differences lead to a clear preference for companies: France has only approved 3 CASPs, and its strict standards caused OKEx to abandon the French market last July.
EU regulators are examining Malta. According to Bloomberg, after Bybit was hacked, regulators from multiple countries urged ESMA to investigate OKEx and review Malta's approval process. AFP reports that ESMA has initiated 'peer review' for certain member states with lenient regulations.
An anonymous executive from a European CASP confirmed to CoinDesk that ESMA is indeed auditing Malta's financial regulatory authority. ESMA and France's AMF declined to comment on this.
Growing pains of EU crypto regulation
Mark Foster, head of EU policy for the Crypto Innovation Committee, pointed out that France's objections to the rapid approval model reflect the fundamental contradictions in the EU's implementation of MiCA: the balance between regulatory centralization and member state autonomy.
Foster raises a key question: 'Should the EU choose federal centralized decision-making to counterbalance the US and China, or maintain decentralization to respect the professional advantages of individual countries? The latter is crucial for member states, as excessive centralization of power will harm their interests.'
Crypto companies face challenges due to the varying implementation standards of MiCA in different countries. The statement from the Bitpanda exchange is quite representative—when the platform obtained a BaFIN license in Germany in January 2024, it emphasized, 'This is an official license that takes effect immediately, not a 'principle approval' issued by certain jurisdictions.'
As an exchange that holds MiCA licenses from Austria, Malta, and Germany, Bitpanda has not directly commented but its statements hint at doubts regarding the equivalence of licenses.
Investment citizenship programs
In addition to the controversy over regulatory centralization, Malta's 'investment citizenship program' has recently escalated into a judicial confrontation with the European Commission. A month ago, the European Court ruled that the country's 'golden visa' program, which sells EU citizenship for an investment of around one million dollars, is illegal. The European Commission pointed out that the program opens doors to money laundering, tax evasion, and corruption.
A former investigator for France's anti-money laundering agency Tracfin revealed, 'Countries that promote golden passports often simultaneously establish lenient offshore company regulations.' He pointed out, 'This is no coincidence—these resource-poor economies are often tax havens that stimulate development through such policies.'
Although Malta has not appealed, it stated that it is assessing the legal effect of the ruling. While the 'golden visa' is not directly related to crypto regulation, the country's model of attracting wealthy individuals and crypto giants shows similarities. Documents obtained by CoinDesk reveal that OKEx's Chinese founder Sun Yuchen obtained a Maltese passport in March 2024.
An anonymous compliance expert who has provided services to multiple CASPs stated, 'There is arbitrage space in the European regulatory system, and companies can choose the easier path. If companies flock to Malta due to slow approvals in other countries, it indicates that we have failed to establish an effective system for legitimate trading institutions.'