By Alexey Pospekhov
October 19th, 2018

Malta – The blockchain island

Crypto Gold Rush of XXI century

In the last couple of months, probably every single individual in the crypto community went crazy about one word – Malta.

Dozens of DLT pioneers, such as exchanges, fintech services, bankers, financial figures, marketing and PR agencies сould not go a day without talking about another step further in legislating ICOs, crypto currencies, and the whole Maltese DLT movement.

Currently, the first thing everyone arriving at Geneva airport can see is a number of billboards advertising banking management software. There is no doubt this is a new age celebration of blockchain & crypto companies while presenting them to both enthusiasts and passengers who may have never heard of this before.

Malta-what? A small ancient island at the bottom of the Mediterranean sea that has gained full independence from the British Empire back in 1964, now is the epicenter of the 4th Industrial Revolution. Being a part of the European Union since 2004 and part of the EURO zone since 2008 a small island nation has made its fortune on financial services, gambling licenses, and now – DLT.

Delta Summit was the first in a series of conferences that are going to take place on the island several times a month. More than 3500 attendees, 200 exhibitors, 100 speakers and tons of media attention gathered in a place which was far from main financial centres only a while ago.

Rockstar list included Binance, Okex, Cubits, crypto.com as well as Tim Draper with a long list of officials, such as prime minister Joseph Muscat, MDIA chief Silvio Schembri, MFSA representatives, MGA and many other government agencies. It is a rare occasion in blockchain and crypto to see regulators sharing the same view with disruptors. At least for now.


“I think it is the exceptional philosophy of Maltese: regulation should encourage innovation! We can see the performance of numerous structures and repeat that. We are creating a legal framework, and, I think, we can use tactics to apply it to new opportunities”.


Kenneth Farrugia, the Chairman of Finance Malta, told Future Times.

“I think blockchain and everything we develop here is not that restricted for this industry only. But there are multiple blockchain policies around the globe and here I think Malta’s proposition is very strong, as DLT can be tested here across numerous applications due to having multiple choices. I am sure there are opportunities here as well as the environment for many blockchain solutions. Additionally, we want to launch our products globally. We intend to operate in Malta and I think they have great responsibility for ensuring that we have got the right thing for this country. It will showcase the development possibilities of the market.“ – he added later.

TIME TO GOVERN TOKEN GENERATION EVENTS

“I think blockchain and everything we develop here is not that restricted for this industry only. But there are multiple blockchain policies around the globe and here I think Malta’s proposition is very strong, as DLT can be tested here across numerous applications due to having multiple choices. I am sure there are opportunities here as well as the environment for many blockchain solutions. Additionally, we want to launch our products globally. We intend to operate in Malta and I think they have great responsibility for ensuring that we have got the right thing for this country. It will showcase the development possibilities of the market.“ – he added later.


“When the government confirmed that they are interested in Malta to become a crypto island, people started reading about the topic and became more familiar with the idea. Our role is to act as advisors for startups and operators who are ready to start their operations here.”


– said Priscilla Parker from Chetcuti Cauchi.

Obviously, the most exciting part of all this jazz is security tokens promotion (STO) along with the ability of this jurisdiction to execute STOs. Legislation of STOs will create an enormous fund flow to the whole industry.

“Actually, it is already happening. It is not only an idea for the future. We already have a number of tokens. The plan is to create approaches that will be a draft document. But rather than offering standard security, it’s better to use something else. It is not a long process. I would not say that some things are easier than others. Of course, the main part is the structure of the existing tokens. We will not change the nature of the token. But initially they think about having a one and gaining a real profit from the company. You can also guide clients in order to achieve what they want to achieve.” – said Priscilla.

Angelo Dalli from 111Holdings also thinks that legislation is “a big step forward”:


“I think it’s an interesting concept. I think they’re on the right path and they need to have regulation for people to trust them more. I think that in case of right regulation it will succeed. The government has support here. I think Malta has a lot of chances to succeed in it.”


RESHAPING THE BLOCKCHAIN MAP OF THE WORLD

During those several days, you could meet many prominent businesses with a proven track of record in the field: Cubits, Okex, ICONOMI, Neufund, crypto.com (ex. MONACO), Bitbay, just to name a few. All of them have already set-up their office in Malta or are currently in the process of relocation.


“We changed our jurisdiction from Polish to Maltese. So, we are really excited to be here, because it’s a new ecosystem for the blockchain company. It’s not only for us but for other exchanges and other developers who are involved in the crypto business as well. We think that this jurisdiction will be very helpful for our exchange. “


– Patryk Kadlec, VP of BitBay, told Future Times.

Changelly chose to use the same approach:

“About 6 months ago we decided to choose the zone of jurisdiction that would ideally suit our service and objectives and let us remain anonymous while having a very adequate framework, which is comfortable to operate under and helps the project remain fully compliant. We considered Asia, specifically Hong Kong, but in the end, we chose Malta. It happened not because that it was the last on our list of options, but because of the attitude of this state which is very unique, very goal-oriented in this (crypto) sphere. And it is crucial in business”, said the CEO Ilya Bere.

THE REAL CRYPTOVALLEY?

Unlike Zug (the motherland of Swiss Cryptovalley), it seems that Malta will become a real hub for blockchain companies. They are not planning on setting up mailboxes, but rather establishing the real presence, which makes the whole story absolutely different. Imagine all people in crypto & blockchain business just set up in one place – it can become a reality.

Additionally, it means a strong interest from VCs and business angels.


“I was thinking of the ways we could help blockchain industry go bigger, because the safer the industry is, the higher the chance for me to be successful with my own business can be. So what I did myself to make these things happen was to move people to Malta because if we have the biggest exchange in the world along with all these office spaces, we would be able to host companies that move with the goal to create a system where all companies would be on campus and anyone could have a place to start.”


– said Alex Dreyfus, a famous French entrepreneur who has been living in Malta for the last 12 years. Although he is well known in other industries, currently he fully dedicates his resources to DLT projects, specifically Chilliz, a solution to tokenize football clubs virtual assets.

“I started to think about the technology: what I could do there, how I could become more innovative. We thought about the potential ways to expand blockchain for very specific projects and areas. One of them is Chilliz. We raised 60M dollars. When raising funds, we started off with 12 people and now there are nearly 50. We managed to create a platform where our client can acquire tokens from various sports teams. As a result, we will issue tokens and fans will be able to vote in order to become more engaged in our project. Blockchain allows us to do 2 things. First of all, it is the creation of a unique voting platform where it is impossible to cheat. Secondly, we started printing tokens for sale and now our customers can create a digital asset. They can vote only if this token has been acquired previously. As a result, these two things are very useful because of blockchain,” – said Dreyfus.

Alex cannot wait for new talents to arrive. By the end of the month the entrepreneur is planning to open a new co-working space for blockchain projects here in Malta.


“I think this Maltese sector is very realistic. Yes, it may seem pretty slow, but still more active than what we can see in other jurisdictions. In other words, you can have an innovative product and good framework yet it may still need improvement in policies. We will definitely continue to develop a legal framework. Geographic position is a very important thing that cannot be replicated. We are close to Africa and we have a good relationship with them. We have 3 embassies in this continent. Therefore, we have to be conscious as well as hold both high standards and right people on board.”


– finally added Kennet Farrugia from Finance Malta.


After 2 days of hard talks, official meetings and lavish afterparties, I am sitting on a rocky beach of St. Julians, watching the waves glisten with the sparks of gold as the tide soaks up the drowning sun.

You can see all the casinos and clubs reflecting their restless neon lights off in the sunset water. 15 years ago, this small island in the middle of the Mediterranean sea managed to clinch a spot in finance and gambling.

Will they be able to repeat their success in the brave new crypto world?

Time will tell.

In the meantime, Blockchain Island is the best thing that has happened to the industry over the years.

The latest version of the article was updated on November 14.