The Maltese fast-track
The Mediterranean archipelago of Malta might be making it a little too easy for crypto companies to secure a license under the Markets in Crypto Assets (MiCA) regime.
Under MiCA, obtaining a crypto asset service provider (CASP) license allows a crypto company to operate anywhere in the European Economic Area. The licensing process varies from country to country, but typically takes several months.
However, in Malta (population 550,000) large crypto companies like OKX and Crypto.com have been granted licenses in record time — a matter of days.
Even more remarkable, in OKX’s case, is the fact that it revealed a $500 million settlement with the U.S. Department of Justice shortly after receiving approval from the Maltese authorities.
The island’s main financial regulator, the Malta Financial Services Authority (MFSA), told CoinDesk that the decision to grant OKX the license had been made while keeping in mind “the need for a balance between comprehensive assessments and processing expediency.”
OKX, for its part, says it has operated in Malta since 2018, that it began working on its MiCA application in 2023, and that it held a Maltese VFA license (which, in the country, makes a firm eligible for a fast-track to MiCA) prior to its application.
Even so, the speed of Malta’s licensing process is raising concerns within the European Union. The European Securities and Markets Authority (ESMA), the EU’s financial market supervisor, conducted a peer review of the country’s decision to grant the license to a particular crypto firm.
The findings? The report questioned “the timing of the authorization of the specific entity under MiCA given that several material issues remained unresolved at the time of the authorization.” In short: the Maltese regulator could’ve used the application process as an opportunity to sort out the firm’s compliance weaknesses.
We don’t know the name of the firm at the center of ESMA’s report. OKX has not denied nor confirmed being the entity in question. Whichever company it is, it’s probably giving a headache to Maltese regulators, who are being put on the spot only seven months after MiCA came into force.
Taking a step back, the situation with Malta seems to show that even within a unified, comprehensive framework like MiCA, possibilities for regulatory arbitrage still exist.
