Malta Financial Services Authority: Inexperienced investors must not invest more than 5,000 euros in virtual financial assets within 12 months

According to the latest regulations issued by the Malta Financial Services Authority, cryptocurrency investors who lack investment experience can only buy no more than any value within any 12-month time frame. 5,000 euros of virtual financial assets – such as the initial token issuance (ICO).

According to the Malta Financial Services Authority, only those investors who are considered to be investment-experienced can invest more money, such as investors who have previously been involved in initial token issuance. But even so, these experienced investors should not invest more than 1% of their net assets (excluding their real estate) in their virtual financial assets.

In fact, the Malta Financial Services Authority had made this decision after two consultations on this issue this summer. Given the risk nature of virtual financial assets, regulators had to set relatively high standards.

The Malta Financial Services Authority said that the current concerns of global financial services regulators include cryptocurrency investment failures, fraud, and money laundering. In particular, the current initial token issuance is often unfamiliar to the industry in an unregulated environment. Investors with weak risk perceptions have led to repeated incidents of fraud.

The latest regulatory regulation currently introduced is actually a protection mechanism for investors. In addition to setting investment restrictions, the Malta Financial Services Authority also requires an independent third party to be the custodian of assets and investor funds.

In November last year, the European Securities and Markets Authority issued a high-risk warning to investors on the initial token issue, emphasizing that initial token issuance is easily affected by illegal activities, and some initial token issuance projects are identified as fraudulent, and some .

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It may be used for money laundering, and blind investment by investors may make all of their investment capital, because these projects lack exit mechanisms and are subject to extreme price fluctuations.

Last week, the European Securities and Markets Authority included Malta in seven cryptocurrency and blockchain jurisdictions. In a proposal submitted to the European Securities and Markets Authority, the Securities and Markets Stakeholders Group stated that it has taken proactive measures for initial token issuance and cryptocurrency.

The European Securities and Markets Authority is the European Union’s independent financial market regulator, headquartered in Paris, France, with the aim of improving investor protection and promoting a stable and orderly financial market; the European securities and market shareholder group responsible for drafting relevant reports is mainly Europe.

The Securities and Markets Authority, its board of directors and shareholders provide advisory services and are also responsible for assisting EU and EEA member states in the development of legislative and regulatory rules for initial securities issuance and cryptocurrency.

The purpose of this report is to provide the European Securities and Markets Authority with the basis of existing regulations to curb the initial token issuance and virtual currency risk – especially in relation to investor risk.


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