Regulation of cryptocurrency exchanges in Malta: licensing and requirements.

Nikita Veremeev

08.09.2025 | 6 min read

Updated: 08.09.2025

Regulation of cryptocurrency exchanges in Malta is overseen by the main national regulator, MFSA, which sets strict requirements for all participants in the virtual financial assets market. This approach has made Malta one of the first countries to offer a transparent legal environment for cryptocurrency exchanges and to implement the specialized VFA Act.

VFA Act for Cryptocurrency Exchanges: What You Need to Know

The Maltese VFA Act is the first law in Europe that clearly defines the status of virtual financial assets and sets standards for regulating FinTech and asset tokenization. Unlike most jurisdictions where the legal status of cryptocurrency remains undefined, in Malta, digital assets are classified according to strict criteria: from utility tokens to investment tokens and security tokens.

COREDO’s practice confirms: Proper token qualification at the stage of preparing the white paper and business model is key to successful licensing and reducing regulatory risks. The VFA Act demands not only transparency of the token structure but also the implementation of investor protection mechanisms, which is especially important for collective investment schemes and professional investors.

The Role of MFSA and MDIA in Cryptocurrency Exchange Regulation

MFSA (Malta Financial Services Authority) is the main financial supervisory body responsible for strategic oversight of cryptocurrency exchanges, Licensing, and VFA law enforcement. For innovative projects, the role of MDIA (Malta Digital Innovation Authority) is also important, as it is responsible for blockchain regulation, smart contract audits, and blockchain technology development within the national strategy.

The COREDO team has repeatedly encountered situations where the integration of innovative technologies (for example, KYC automation through smart contracts) required approval not only from MFSA but also from MDIA. In such cases, it is important to pre-establish communication with the innovation technology committee and ensure compliance with the MFSA strategic plan.

Licenses for Cryptocurrency Exchanges in Malta

Illustration for the section 'Licenses for Cryptocurrency Exchanges in Malta' in the article 'Regulation and Licensing of Cryptocurrency Exchanges in Malta'
Licenses for cryptocurrency exchanges in Malta play a key role in ensuring legal activity and compliance with the stringent requirements of the local regulator MFSA. To open and operate a cryptocurrency exchange in Malta, it is necessary to choose one of the types of VFA licenses, each of which regulates the list of permissible services and working conditions.

Types of VFA Licenses in Malta

Type VFA License	Description	Recommended For	Main Requirements
VFA Class 1	Consultations, informational services	Financial consultants, analysts	Minimum capital, compliance
VFA Class 2	Execution of client orders	Brokers, dealers	Stricter capital requirements, AML
VFA Class 3	Asset management, custody	Custodians, managers	High level of control, reporting
VFA Class 4	Exchange operators, large platforms	Cryptocurrency exchanges, marketplaces	Maximum capital requirements, audit

COREDO’s implemented projects show: for international cryptocurrency exchanges targeting professional investors and collective investment schemes, the optimal choice is a Class 4 license. It provides maximum legal protection, access to investment tokens, and the ability to scale the business.

Obtaining a Cryptocurrency License: Steps

Obtaining a cryptocurrency license in Malta is a multi-step process requiring strategic planning. In practice, COREDO recommends the following step-by-step approach:

Testing the business concept through Malta’s FinTech regulatory sandbox. This allows minimizing regulatory risks and adapting the product to MFSA requirements.
Preparing documentation: business plan, AML/KYC policies, description of blockchain infrastructure, financial model.
Submitting the application to MFSA: includes Due Diligence of all beneficiaries, confirmation of capital sources, description of financial monitoring procedures.
Interview with the regulator and audit of business processes.
Obtaining permission to trade cryptocurrency and integration into the register of licensed providers.

In COREDO’s work, special attention is paid to capital requirements: for Class 4, the minimum capital is from 730,000 euros, as well as the implementation of tools for testing business concepts in a regulatory sandbox.

Requirements for Corporate Reporting and Management

Modern corporate governance requirements in Malta include not only the presence of an independent board of directors and corporate secretary but also the implementation of comprehensive compliance procedures, regular financial monitoring, and transparent reporting to MFSA.

A solution developed by COREDO provides for the automation of reporting, the integration of risk management tools, and the introduction of internal audits, ensuring compliance not only with Maltese but also European regulatory standards.

AML for Cryptocurrency Exchanges in Malta

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AML for cryptocurrency exchanges in Malta is not just a formal requirement but a key condition for operating in one of the most advanced and regulated crypto jurisdictions in Europe. AML and KYC mechanisms enable Maltese exchanges not only to meet stringent local and international regulatory standards but also to build long-term trust among users and partners.

AML/KYC and Financial Monitoring: What It Is

Malta’s AML requirements are considered some of the strictest in the EU. For cryptocurrency exchanges, not only basic AML/KYC procedures are mandatory, but also the implementation of advanced financial monitoring tools, including automated systems for detecting suspicious transactions and regular oversight of VFSPs (Virtual Financial Services Providers).

COREDO’s experience shows that the best AML practices for cryptocurrency exchanges in Malta include integrating AI solutions for transaction analysis, personnel training, and constantly updating procedures in accordance with the recommendations of FATF and the MFSA strategic plan.

The implementation of such measures not only enhances the efficacy in combating financial crime but also minimizes risks of legal violations, the responsibility for which we will consider further.

Liability for AML/KYC Violations

AML/KYC violations in Malta lead to serious consequences: from fines to license revocation and criminal liability for financial crimes. Strategic oversight by MFSA includes regular checks and, in some cases, the conduct of an independent audit.

In COREDO’s practice, there were cases where timely implementation of additional compliance procedures and the legal protection of crypto business allowed avoiding sanctions and maintaining client trust, even under tightened regulatory requirements.

MiCA and Crypto Asset Regulation in Europe

Illustration for the section 'MiCA and Crypto Asset Regulation in Europe' in the article 'Regulation and Licensing of Cryptocurrency Exchanges in Malta'
MiCA is a key tool for creating a unified approach to crypto asset regulation in Europe, covering all 27 EU countries and encompassing a wide range of digital assets and market participants. The new rules have already come into force, and countries like Malta now need to adjust their national legislation according to the pan-European MiCA requirements to ensure transparency and stability for crypto asset market participants.

Harmonization of Malta’s Legislation with MiCA

Since 2024, Malta has actively integrated the MiCA EU regulation by harmonizing its standards with European requirements for cryptocurrency exchanges. This ensures financial stability, transaction transparency, and long-term regulatory effects for all market participants.

The COREDO team participates in working groups on adapting national legislation, allowing clients to account for future changes in advance and build sustainable business models.

The Impact of MiCA on the Operation of Cryptocurrency Exchanges

MiCA integration requires a revision of business processes: compliance requirements are tightened, investor interests protection is strengthened, and a unified system for digital asset classification is introduced. For Maltese cryptocurrency exchanges, this means not only increased client trust but also the need for compliance automation investments.

The implementation of MiCA, according to COREDO’s experience, enhances the investment attractiveness of the Maltese license and simplifies entry into the European market.

Regulation of Cryptocurrency Exchanges: Technology and Innovation

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The regulation of cryptocurrency exchanges has become one of the key topics amid rapid technology development and the constant emergence of innovative services. The balance between legal requirements and technological capabilities forms new rules for the crypto business, opening opportunities for tools such as MDIA and regulated sandboxes.

The Role of MDIA and Sandboxes for Crypto Business

MDIA provides not only blockchain regulation but also the creation of a testing environment for business concepts through Malta’s FinTech regulatory sandbox. This offers startups a unique opportunity to test innovative solutions under the supervision of the innovation technology committee.

In one of COREDO’s cases, the integration of smart contracts for automating settlements and KYC procedures was successfully tested in the sandbox, accelerating licensing and reducing costs for platform launch.

AI and Technologies in Compliance and Oversight

Contemporary risk management requirements and the MFSA strategic plan call for the active introduction of AI for transaction analysis, anomaly detection, and reporting automation. Such innovative technologies not only elevate the level of compliance but also minimize the human factor in financial monitoring.

COREDO’s solutions employ hybrid models that combine machine learning and expert analytics, ensuring business sustainability and conformity to the strictest cryptocurrency regulation standards.

Cryptocurrency License in Malta: Advantages

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The cryptocurrency license in Malta provides companies access to one of the most modernly regulated and attractive markets for digital assets. Key advantages include a developed legal environment, international reputation, and special competitive conditions, making cryptocurrency business both viable and secure.

Next, we will consider the specific advantages licensed cryptocurrency exchanges in Malta gain, starting with tax incentives.

Tax Benefits for Cryptocurrency Exchanges

Malta offers significant tax benefits for licensed cryptocurrency exchanges: the effective corporate tax rate can be reduced to 5% with the proper structure, and tax incentives are available for investment funds and citizenship-by-investment schemes.

COREDO’s practice shows that well-structured business planning allows not only optimizing taxation but also enhancing ROI for crypto businesses through investment incentives.

How to Scale the Business and Ensure Sustainability?

The Maltese license provides an opportunity to scale cryptocurrency exchanges: from the local market to the entire EU territory. Long-term regulatory outcomes reflect business model sustainability, reduced regulatory risks, and increased client trust.

The COREDO team supports projects at all stages: from piloting to scaling, implementing business risk management tools and ensuring transparency for investors.

ICO and Token Licensing in Malta

ICO and token licensing in Malta has become a key area for crypto projects seeking legal operation in the EU. The stringent requirements of Maltese regulation ensure transparency and investor protection, while a comprehensive approach to licensing allows for legal issuance and trading of tokenized assets.

ICO and Tokenized Asset Licensing

ICO licensing in Malta is governed by specific provisions of the VFA Act and requires strict compliance with due diligence procedures, information disclosure, and cryptocurrency trading permission. For investment tokens and collective investment schemes, additional requirements for reporting and investor protection apply.

COREDO’s completed projects include obtaining licenses for investment exchanges and cryptocurrency service providers, allowing clients to legally issue and trade tokenized assets.

Investors’ Rights Protection

Maltese legislation provides comprehensive legal protection for crypto businesses and professional investor interests. This is achieved through transparent procedures, mandatory audits, and compensation mechanisms in the event of violations.

COREDO’s experience shows that timely implementation of legal support tools and continuous dialogue with the regulator helps minimize risks and increase investor trust.

Cryptocurrency License in Malta: How to Obtain

For an international company, obtaining a cryptocurrency license in Malta requires a clear strategy and staged compliance implementation. In practice, COREDO recommends:

Conduct a preliminary audit of the business model and assess compliance with MFSA requirements.
Prepare a full set of documents, including AML/KYC policies, blockchain infrastructure description, and a financial plan.
Test the product in the FinTech regulatory sandbox to reduce regulatory risks.
Ensure sufficient capital and implement internal control procedures.
Choose a reliable partner for the licensing process support and subsequent compliance.

Recommendations for Entrepreneurs

Regulation of cryptocurrency exchanges in Malta is not only a formality but also a strategic tool for minimizing risks, increasing investment appeal, and ensuring long-term business sustainability. Licensing cryptocurrency exchanges in Malta opens access to the European market, and adhering to compliance and AML requirements in Malta becomes a guarantee of client trust and investor interest protection.

COREDO’s practice confirms: success in this jurisdiction requires not only knowledge of the regulatory framework but also the ability to establish effective corporate governance processes, integrate innovative technologies, and respond flexibly to changing regulatory environments.

Regulation and Licensing of Cryptocurrency Exchanges in Malta

What strategic advantages does the MFSA-issued cryptocurrency exchange license provide?
The MFSA license ensures recognition in the European market, access to investment funds, tax benefits, and a high level of legal protection.

What are the key Stages for Obtaining a VFA License for a Cryptocurrency Exchange in Malta?
Testing the business concept, preparing documentation, submitting the application, auditing processes, obtaining permission, and integrating into the register of licensed providers.

What risks and challenges may arise when licensing a cryptocurrency exchange in Malta?
The main risks include non-compliance with AML/KYC requirements, insufficient capital, token misclassification errors, and delays in regulatory approval.

How does AML/KYC regulation in Malta affect the operational processes of a cryptocurrency exchange?
It requires the implementation of automated monitoring systems, regular staff training, and constant updating of internal policies.

What tax advantages are available to cryptocurrency exchanges with a Maltese license?
Possibility to reduce the effective corporate tax rate, access to investment incentives, and utilization of citizenship-for-investment schemes.

What impact does MiCA integration have on a cryptocurrency exchange’s business model?
It raises compliance requirements, enhances investor protection, but opens new opportunities for scaling and entering the European market.

How to ensure long-term sustainability and scaling of a cryptocurrency exchange under Maltese regulation?
Implement risk management tools, automate compliance, invest in innovative technologies, and maintain constant dialogue with the regulator.

What corporate governance requirements are imposed on a cryptocurrency exchange in Malta?
Presence of an independent board of directors, a corporate secretary, implementation of internal control procedures, and regular audits.

What risk management practices are recommended for Maltese cryptocurrency exchanges?
Using AI for transaction monitoring, regular stress testing of the business model, implementation of reporting automation tools.

What are the consequences of violating AML/KYC requirements for a cryptocurrency exchange in Malta?
Fines, license revocation, criminal liability, and loss of client trust.

If your business is focused on international growth, transparency, and long-term sustainability, choosing Malta and strategic partnership with COREDO becomes the optimal solution for an effective entry into the digital assets market.

Regulation and licensing of crypto exchanges in Malta