Malta has been hyped up as the happy ending for crypto business who have trouble operating elsewhere, but there’s a problem: banks are reluctant to grant crypto startups business accounts until they’re properly licensed with the MFSA. This process can take up to six months for a first-round response, leaving many businesses unable to operate using local bank accounts.
A Banking Snag in Blockchain Paradise
A recent report by the Times of Malta suggests that while crypto businesses have flocked to the world’s so-called blockchain haven, a task as simple as opening a bank account isn’t nearly as straight-forward as they had anticipated, with banks showing them the door until they’ve received the appropriate licensure from the Malta Financial Services Authority.
Malta, a tiny island in the middle of the Mediterranean, has — thanks to its highly publicised commitment to becoming the “Blockchain Island” — made a name for itself in an industry where regulatory loyalty stretches as far as those countries that provide the most favorable support conditions.
However, while many cryptocurrency startups, including high-profile exchanges like Binance, Bittrex, Okex, Bitbay, and Zebpay, have moved or extended operations from stricter regulatory jurisdictions to set up shop incorporating their businesses in crypto-friendly Malta, it appears the reality might not be as rosy.
In reality, Malta is currently not the one-stop crypto business-shop the media reports on.
Numerous service providers confirmed to the Times of Malta that banks are citing the reason for their rejection of account applications as being “outside their risk appetite.” Additionally, Parliamentary Secretary for Financial Services Silvio Schembri told the paper that a distinction should be made between blockchain and crypto operations since banks are less likely to do business with the latter.