On the 23rd October, 2017, the MFSA issued a Consultation Document on the proposed regulation of collective investment schemes investing in virtual currencies. Below is a summary of the main proposals, which require the scheme and in certain cases its service providers to:
- Prove competence in the field of information technology, virtual currencies and their underlying technologies;
- Include risk warnings in the offering documentation in connection with the scheme’s investment in virtual currencies, whether direct or indirect;
- Ensure that the risk profile of the virtual currency to be invested into is in line with the risk management policy of the scheme;
- Ensure that the quality of the virtual currency is established before any investment is made by the scheme in that virtual currency;
- Have the necessary skills and expertise to value and verify the value of the scheme’s investments in virtual currency.
The consultation period shall end on the 10th November, 2017.