January 28, 2019
At various times in 2018, the Maltese government loudly proclaimed that it had become the “Blockchain Island”. I’m sure there were many in EU policy circles that worried about the combination of Malta’s current reputation for financial services transgressions and an emerging, lightly regulated finance sector.
Well, it seems that going from press releases to reality isn’t so easy.
However, in recent weeks there have been three quite significant blows to the emerging sector in Malta:
1. Crypto Exchange Cubits Closed. The exchange had opened an office in Malta, but was forced to close in December after being hit by some sort of fraud.
2. Binance Opened In Jersey. This is the real body blow. Binance is one of the largest exchanges in the world and in 2018 had announced that it would open an office outside of Japan in Malta. The reasons why it chose not to follow through on that are not clear, but in January it opened in Jersey.
The reality though is that it takes a long time to build the kind of knowledge base and infrastructure needed for a sector like blockchain. While the lawyers, accountants, auditors and company formation agents may say that they understand the needs of crypto businesses in Malta, my guess is that for now, those might just be words. For example, Malta’s main bank, BoV, still refuses to let clients transfer money to or from a crypto exchange from their personal accounts. If it is that hard for an individual to bank, how difficult must it be for an exchange to get the banking facilities that they need?
3. DQR Releases Most Of Its Malta Based Staff. Possibly the largest blockchain related employer in Malta has let go most of it’s 65 staff members. I happen to know several people that work(ed) for DQR, so this is sad news.
There are still many opportunities in Malta for financial services professionals, but there seem to be very few companies currently recuiting for blockchain positions. In the long-term, these three events are tiny speed bumps in the road, but in the short-term, they are very real blows to Malta’s likely chances of succeeding in bringing lots of blockchain businesses to the country.financialguy