19 Oct Two-thirds fail Malta’s first virtual financial asset agent exam
Malta has moved quickly to position itself as one of the friendliest jurisdictions for cryptocurrency and digital asset regulations and trading.
Tax rates are as low as 5% and recent laws are designed to make cryptocurrency issuing and trading easier. The Malta stock exchange is innovative and ready to move into full digital asset trading soon. And the world’s largest cryptocurrency exchange, Binance, recently moved its head office from Hong Kong to the regulatory-friendlier island nation.
Malta’s Virtual Financial Assets Act (VFA) is scheduled to come into effect in November. In preparation, the Malta Financial Services Authority (MFSA) developed an examination to accredit virtual financial asset advisors or VFAs.
Two-thirds failed the first VFA exam
MFSA’s goal was to ensure accountants, auditors, and other financial service professionals have the expertise to register and serve as virtual financial advisors given the unique knowledge required for managing digital assets.
Unfortunately, nearly two-thirds of the first 250 registrants taking the test in September failed even after MFSA officials adjusted the multiple-choice exam to boost the pass rate potential.
According to the Times Malta, “In early September, the financial services watchdog issued a consultation document saying it had “become evident that certain industry players are not sufficiently prepared to register as VFA agents” and that there was a “need to address an existing expectations gap, particularly in view of the inherent risks of this sector.”
The newspaper reports many practitioners are frustrated with the process, including the unannounced change in the marking scheme.
VFA agents key to industry success
VFA agents are a crucial part of the government’s cryptocurrency oversight. Under the new VFA Act, companies planning to issue an Initial Coin Offering (ICO) in Malta must hire an accredited VFA agent to guide companies through registration and regulatory procedures.
VFA agents must be registered and accredited by the MFSA in addition to a professional designation as an advocate, accountant, auditor or lawyer.
The Institute of Financial Service Practitioners would not comment publicly on the exam results so it’s unclear what adjustments are planned to ensure the required expertise and experts are available to help companies navigate digital asset registration in Malta.
The report card for VFA accreditation must improve substantially if Malta is to have a credible registration and regulatory system supported by professional, accredited virtual financial asset advisors.
It will be back to VFA school for two-thirds of the first class of would-be VFA agents and let’s hope they hit the books harder this time around. There’s a lot of potential business but also a lot of knowledge required to guide companies in the fast-changing digital asset world.