SERVICING THE ICO INDUSTRY IN MALTA

WORDS BY

MARK

ATTARD - CHIEF EXECUTIVE OFFICER, BDO

Initial Coin Offerings incentivise the creation of platforms for innovative ideas to be implemented. Raising capital through ICOs has brought about a win-win situation whereby the issuers receive the working capital required to take their project to the next level - while investors, small and large, are offered the chance to invest in innovative start-up companies, diversify their portfolios and, in the case of utility tokens, make use of tokens to purchase the services offered on the founders’ platforms. The raising of funds can be done by way of private contributions and through a public offering. Both methods of ICOs allow for a convenient and secure way for participation of third parties through distributed ledger technology.

Malta boasts of a pro-business Government pioneering DLT legislative frameworks, efficient tax structuring opportunities and a rapidly growing blockchain ecosystem. Malta has become one of the first jurisdictions to provide for a legal framework regulating token offerings and cryptocurrency exchanges. Through the introduction of the Virtual Financial Assets Act, the legislator is introducing a new regime whereby founders of tokens would be able to benefit from a degree of legal certainty, whilst simultaneously providing for investor protection to all third parties contributing to the project.

It has become explicitly clear that having the right advisors alongside the founders of the project, increases the chances of success for ICOs and their related project, whilst providing the necessary peace of mind that regulations are abided to by the Issuer. BDO Fintech Advisory Limited will in fact, apply to become a VFA Agent under the new legal framework. This role will entail a responsibility to ensure that the legal person issuing a token or applying for a VFA licence would have satisfied all of the requirements arising from the Act, and we would be able to advise and guide clients on all matters relating to their responsibilities and obligations. Therefore, ensuring compliance with the provisions of the Act and any other applicable rules and regulations.

Equipped to provide a wide array of advisory services, BDO Malta, as a firm, is in a position to advise and recommend the ideal structure based in Malta as well as provide ancillary services thereto, in order for the client to benefit from all the incentives that Malta as a Blockchain jurisdiction has to offer. In particular, advice related to the token categorisation is crucial in light of the various legal and tax implications which an ICO may bring about. At BDO Malta, we continuously work to ensure that, amid the disruptive regulation which exists surrounding ICOs and other blockchain-related propositions, the advisory provided would take into consideration both proposed legislation as well as other industry accepted practices upon which future governance would be expected to be based.

BDO Malta also has introducer agreements with all of the commercial banks in Malta. In this respect, we would be able to provide assistance in introducing our clients to licensed credit institutions and assist them with setting up their bank accounts to facilitate the operations of the proposed business model.

Thanks to our connections with other member firms forming part of BDO’s strong global network, we are also able to stay on top of developments taking place in other jurisdictions to be able to determine how structures in Malta can complement already existing operations, or how Malta can offer alternative options for costeffectiveness and stability.

Apart from initial coin offerings, we also offer full tax advisory services in relation to the trading of cryptocurrencies, full legal advisory if one is seeking to establish a blockchain business in Malta, including the launching of DLT platforms, assisting in the setting up of collective investment schemes and advise constantly on any legal developments directly affecting this sector.

At BDO Malta we ensure that no rock is left unturned and we will continue to safeguard the interests of the founders behind these platforms as well as the interests of the individuals and organisations placing their trust and assets on these projects within such an innovative sector which is sure to continue to prosper as worldwide adoption continues to be implemented.

OUR SERVICES INCLUDE:

• Consolidated report covering the legal and tax elements of the proposed structure

• Legal Review of the White Paper, the Token and the Tokenomics

• Setting up of the legal structure (according to the best identified legal form suited for the structure)

• Drafting or Review of the legal documentation including terms & conditions, privacy policies, private token offering documents and any other legal document which could be applicable

• Assistance with launching the ICO including pitching opportunities in collaboration with our partners having access to large-sized audiences, both live and online

• Traditional banking solution with European Banks

• Post-ICO Token and Legal Management

• Assistance with applications for respective licences

• VFA Agent Services

• Audit Verification Services

• Advice on Accounting Treatment & Policies