$71B in crypto has been passed through ‘blockchain island’ Malta since 2017

Malta’s strategy to become a global hub for blockchain and digital assets appears to be working, though lax regulatory oversight has raised concerns over money laundering and other financial crime.

$71B in crypto has been passed through ‘blockchain island’ Malta since 2017

According to the report from Times Of Malta, roughly $71 billion worth of cryptocurrencies has been passed through Malta since the tiny European country adopted its Blockchain Island” strategy in 2017.

Malta has upgraded its crypto-focused regulations during recent years, financial watchdogs are concerned about whether the nation’s anti-money laundering regime has been robust enough.

During the discussion in The Financial Action Task Force (FATF) meeting last week in Paris, whether Malta should put on a list of countries that have fallen short of their obligations to stop financial crime. Specifically, the financial watchdog is concerned about Malta’s initial push to embrace cryptocurrencies in 2017 and 2018 when the sector was far less regulated. 

FATF officials have also expressed concerns over the country’s law enforcement regime.

There are several blockchain firms that have established operations in Malta in 2018, including leading cryptocurrency exchange Binance, in anticipation of more favorable regulations. 

Last month, Crypto.com acquired Malta’s Class 3 Virtual Financial Asset License, paving the way for broader recognition of cryptocurrencies across the European Union.

Companies were allowed to operate without a license for up to one year in the country. An anonymous source within the industry told the Times of Malta that the one-year grace period contributed to an explosion of high-risk transactions carried out by cryptocurrency exchanges in an unlicensed environment.

In June 2020, Malta broadened its blockchain ambitions, pivoting to digital assets more holistically as a way to drive adoption and business growth.