BELEGA Project Update
Based on significant changes in the environment and its effect on business planning, BELEGA has taken the critical decision to exit the Malta jurisdiction. Furthermore, together with this move away from the country, the Company has initiated a strategic revision exercise to adapt to both the jurisdictional change and the necessary business model adjustments as a result.
The use case of BELEGA tokens remains directly tied to a unique crowdfunding platform to be developed in the United Kingdom. Specifically, the platform will feature projects not available from other crowdfunding services, which will provide exclusive investor opportunities and is expected to spark interest in our offering. Investors who own BELEGA tokens will maintain a priority status which will allow them preferred placement within the fund raising processes. In addition, the token will be used by projects to pay Service Fees related to listing and other services on the platform.
An additional project partnership is in discussions and tentatively planned for 2021, more detail will be shared in upcoming media announcements.
We thank everyone interested in and tracking the BELEGA project for your patience as we finalise the strategic revision and necessary work to action the jurisdictional changes. More information will follow as it develops.
Background - The Malta Experience
As the move away from the Malta jurisdiction is a significant change to the story of BELEGA, we would like to share the background that has led to this decision.
In 2018, BELEGA initiated activities in Malta as a small startup in parallel with the country’s Virtual Financial Assets (VFA) Framework announcements and the subsequent VFA Act passed by Parliament with the full active endorsement of the Prime Minister and his Cabinet. This initiative was announced globally and branded Malta the “Blockchain Island” across the industry. These were very exciting times as hundreds, at times, thousands of industry companies from all over the world flocked to the island with energetic interest and enthusiasm.
Flash forward to today, March 2020, and despite the media, press releases, government speeches and announcements, the Malta Financial Services Authority (MFSA) and the Malta Digital Innovation Authority (MDIA), the regulators of the industry charged with enacting the legislation into the market, have yet to approve a single blockchain/DLT/VFA related project or company for a VFA License. As a result, many companies have left Malta in favour of jurisdictions that are delivering on their promises for an inviting regulated environment, although in 2020 this creates other considerations, as the regulation affected in most countries to date has followed the theme of becoming more restrictive in nature. A reality we will adapt too in our revised planning.
Some examples of companies and projects which have left Malta(see links below):
1. CGEX (by Coinone) terminated their service and activities in Malta [*1].
2. BITTREX moved to Liechtenstein and closed its company in Malta [*2].
3. In January 2020, DEX Exchange KYBERSWAP also left Malta and moved to the BVI [*3].
4. Most recently, the MFSA made a public declaration in the press to specifically state that BINANCE is not regulated by MALTA, and the BINANCE CEO in acknowledging this, stated in reply that the exchange will not apply for a license in Malta [*4 / *5].
Malta’s regulatory focus over the past 18 months has been to license what have been defined as “VFA Agents”, essentially traditional lawyers, law firms and corporate service entities which act as agents on behalf of the regulators to perform Due Diligence, KYC, AML and other legislative adherence and vetting checks on all companies entering the country with the intention of applying for a VFA License. Despite appointing 20 VFA Agents in the first half of 2019, to date no license has been awarded to any project of any type.
In addition, recent actions by the banking industry in Malta have resulted in many VFA Agents being stripped of their bank accounts. Banks are simply closing bank accounts of organisations associated with the blockchain industry, without regard for them being licensed by the MFSA as a VFA Agent, or being a law firm or corporate services organisation with known reputations and track records. The banks have made it clear that they are not supportive of the Blockchain Island strategy and refuse to take on the risk level they believe is associated with the industry.
As well, companies which have entered the country to work with VFA Agents to apply for a VFA License, including BELEGA, are refused bank accounts by all banks in Malta. At minimum, this makes daily banking services and payment options in the country impossible, and in the bigger picture, it means that logistically a company cannot fund its activities and grow.
Very simply, the regulatory, operational and financial aspects related to building and developing BELEGA into the opportunity we believe it to be, is impossible to deliver in this environment. After much patience, loss of time and precious capital, we are forced take the decision to move onto another jurisdiction where we can again focus on building a business, at speed, with the support of the country, its service and banking industries. To date, in Malta, it is unfortunate that we have only experienced regulatory disruption and repetitive legal process cycles, at great cost and with much lost time, which is no longer sustainable.
Malta and the EU in general are not providing a truly welcoming environment to the industry in practice, despite its extensive marketing and substantial PR campaigns to the contrary, and based on this reality, we have taken the decision to leave Malta [*6 / *7].
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