Malta Financial Watchdog Issues Warning Against Crypto Trading Platform

Updated: 13 August 2021

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The Malta Financial Services Authority (MFSA) has issued a warning regarding an online crypto trading platform that has untruthfully claimed to be located and licensed in the Mediterranean island nation of Malta.

The company that has been flagged by the MFSA is called Primetradingbot, who, according to the watchdog, is operating what it calls a “dubious” scheme, explaining that:

“Although this entity purports to operate from an address in Malta, the MFSA does not believe this to be the case… The MFSA wishes to alert the public, in Malta and abroad, that Primetradingbot is not licenced or otherwise authorised by the MFSA to provide any investment or other financial services which are required to be licenced or otherwise authorised under Maltese law.”

In addition to not being licensed or located in Malta as the service claims to be, the MFSA also notes that their entire operation may be running a high yield cryptocurrency investment program that is offering prospective investors unrealistic or unsustainable profits.

Malta’s financial watchdog notes that their investment offerings are of a “dubious nature with a high risk of loss of money.”

Malta Has Had its Fair Share of Criticism Regarding Regulatory Practices

Despite being a growing hub for cryptocurrency and blockchain-related businesses, Malta has faced significant criticism surrounding their openness to crypto and DLT companies.

As previously reported, it is expected that the European Commission will be imminently issuing formal binding demands on Malta’s main financial regulatory agency in order to reduce and to expose the amount of fraudulent and illicit activates occurring within the country.

Political opponents to Malta’s current ruling party are quick to point out that the country’s Prime Minister, Joseph Muscat, is open to harboring less than ethical businesses if it adds to the country’s bottom line.

Jason Azzopardi, a Maltese opposition Parliament member, recently wrote on Facebook about Malta’s harboring of shady-businesses, saying:

“It’s [like] thinking that prostitution is OK once part of the proceeds are donated by the pimp to charity.”

Recently, a reporter trying to expose corruption within the country’s government was assassinated in a car bombing, which has likely sparked the European Union’s attention, which could ultimately lead to greater regulatory scrutiny for businesses looking to relocate in the country.

It is clear that crypto and blockchain companies aren’t too worried about any potential regulatory rebuffing by the country’s government, as they continue to relocate to the small island nation.

Most recently, Indian cryptocurrency exchange Zebpay has moved their operations to Malta in an effort to escape the strangling regulations put in place by the Indian Government. Their move to Malta came about after they had to temporarily shut down their operations, and the exchange’s services will now exclusively be available to users in multiple European countries.

Despite cracking down on companies falsely claiming to be licensed in Malta, there are still significant existing concerns regarding the long-term sustainability of Malta being a “light-to-no” regulations cryptocurrency hub, as the EU may ultimately impose harsher regulatory measures.