Malta turns to US firm to fight crime and terror finance risk

Financial regulators in crypto-friendly Malta have appointed a US company to vet cryptocurrency agents.

The Malta Financial Services Authority (MFSA) will work with CipherTrace to approve virtual financial agents that have applied for licences.

Malta recently passed new laws on ICOs, exchanges, and DLT, and Prime Minister Joseph Muscat has promised to make blockchain and other emerging technologies a key focus of the country’s economic growth.

CipherTrace will track the assets that flow through Malta to counter the threat of money laundering and terror finance.

“Ciphertrace Compliance Monitoring will provide the MFSA with powerful oversight tools to automate regulatory processes and audit the risk management of virtual asset businesses licensed in Malta,” CEO Joseph Cuschieri told the Times of Malta.

Last month, the MFSA launched a consultation document on cybersecurity focusing on the advancements of distributed ledger and blockchain technology.

Crime and terror

In its consultation document, entitled “Guidance Notes on Cybersecurity”, the regulator has proposed that all cybersecurity architecture should be in compliance with internationally and nationally recognised cybersecurity standards.

This includes various regulations and directives from the European Parliament and the European Banking Authority.

In the guidance, the MFSA said that the notes are also based on a number of recognised cybersecurity standards, including the Cryptocurrency Security Standard (CCSS). The CCSS is a security standard introduced in 2014 to provide guidance specific to the secure management of cryptocurrencies.

The document explains that a regulated decision-making body should establish and maintain a governance framework that contains provisions relating to cybersecurity.

The framework should comply with recognised cybersecurity standards and the decision-making body would be responsible for establishing and maintaining appropriate governance, good conduct, and policies relating to risk management.