According to the International Monetary Fund (IMF), the Malta Financial Services Authority (MFSA) has been suffering from critical gaps in its administration for anti-money laundering (AML) and combating the financing of terrorism (CFT). The international organization, headquartered in Washington, D.C, also recommending urgent actions for MFSA. Issued by the IMF last week “A Financial System Stability Assessment Report” represents an assessment of Malta’s financial system, the quality of the regulatory and supervisory framework, in addition to the country’s ability to cope with financial crises.
As reports noted, the international agency stated that containing financial integrity risks is solemn to financial stability, where a multi-prong approach is required to address AML/CFT deficiencies. Improving this system is needed to defend the financial sector and the wider economy from the Money Laundering/Terrorism Financing (ML/TF) threats. The IMF report further noted the need for improved procedures for beneficiary owner insight and monitoring of risk-sensitive accounts, particularly for non-resident clients of opaque firms, new technologies such as digital assets and e-gaming and IIP-related funds. The report supposedly recommended implementing more resources, concerning to Blockchain-based technologies and Cryptocurrencies, to monitor service providers. Further, it illustrated the challenges facing the MFSA from the augmented demands of supervising the increasing number of licensed financial institutions in an evolving and more complex regulatory environment, in addition to the requirement of advancing the MFSA’s operational capabilities which enable it to run more efficiently.
Malta is a well-known European country for its Blockchain- and Cryptocurrency-based regulations and political stance. In January this year, the IMF revealed Blockchain, along with remote gaming sectors and the government’s citizenship-by-investment scheme, as being high on their list of concerns on possible AML compliance violations. The international agency stated that the rising numbers of financial bodies under supervision, the rapid growth of new products, the emerging regulatory ecosystem and the tightening of the labor marketplace have put the MFSA under considerable strain.