Operators require MGA approval to accept Virtual Financial Assets

The requirements for operators to be approved for accepting Virtual Financial Assets have been published in a policy paper  by the Malta Gaming Authority (MGA). In order to receive deposits or payments in the form of a VFA, an operator needs approval from the MGA. “If the DLT asset is classified as a VFA, the authorised person shall be responsible for ensuring adherence to the relevant requirements stemming from any applicable legislation and/or regulatory instrument.”

The MGA’s sandbox regulatory framework will be superseded by the policy paper recently published by the Malta Gaming Authority. Authorised gaming operators can accept payments by Virtual Financial Assets (VFA) once they receive approval from the MGA. Additional requirements will need to be in place within three months for approval. Wallets storing VFAs are also required to meet the security measures related to payment flows and approvals. 

A payment can be stopped in special circumstances if the operator’s access to the wallet is lost. In this case the policy obliges operators to notify players in the event of a cancelled transaction to avoid a loss of funds. “Virtual tokens may be acquired directly from the relevant authorised person on its platform. In such a case, the authorised person may allow its registered players to convert fiat currency or VFA into virtual tokens for such players to make use of the virtual tokens on the authorised person’s platform.”

The MGA will approve operators on a case by case basis. “The characteristics of wallets storing VFAs for gaming will resemble any other VFA wallet. There are different wallet types that vary according to the technology used and differ in the manner in which VFAs are stored, and who has access to the wallet.

The MGA has also set requirements to avoid creating exchange platforms. Operators will be required to ensure strict anti-money laundering and combating the financing (AML/CFT) of terrorism measures.

Application to MGA

Authorised operators can apply for approval to accept DLT assets as part of a new licence application. Operators that are already authorised can apply for approval through an application for ‘operatoral payment methods’ and additional currencies can be added with an updated document application using the ‘technical – new games’ application.

Virtual Financial Assets

A wallet address which is similar to a password made up of letters a numbers making it unique is shared with other parties requiring to send or receive payments.

A payment can prevent a payment from going through in the event that access to the wallet is lost. In this case the policy obliges operators to notify players in the event of a cancelled transaction to avoid a loss of funds.

The Virtual Assets Framework was devised by the MFSA to support the innovation and new technologies for financial services in the area of crypto-assets. It ensures effective investor protection, financial market integrity and financial stability.

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