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Malta Appoints CipherTrace to Monitor Crypto Compliance

By Daniel T. | March 13, 2019
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Malta Appoints CipherTrace to Monitor Crypto Compliance

The Malta Financial Services Authority (MFSA) has appointed American blockchain forensics and intelligence firm CipherTrace for technical help in monitoring crypto business activity for compliance purposes.

Local news agency Times of Malta (TM) quoted MFSA CEO Joseph Cuschieri saying, “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.”

Cuschieri also said MFSA is “strongly aware” of the associated risks that businesses in the industry have to do with money laundering and terrorism financing.

CipherTrace’s system has the ability to tap data covering exchanges, addresses, wallets and other businesses to profile everything from criminal addresses and dark markets to gambling services and high-yield investment products, TM reported.

The company was started in 2015 by Silicon Valley entrepreneurs and initially funded by the Science and Technology Directorate – the R&D arm of the US Department of Homeland Security – and Department of Defense agency DARPA (Defense Advanced Research Projects Agency).

CEO of CipherTrace, Dave Jevans, commented, “Cryptocurrency businesses often have difficulty establishing trust and maintaining banking relationships because of their perceived risk.” He said “CipherTrace’s tools can help financial institutions decide which crypto businesses to trust and avoid declining “valuable customers,”.

CipherTrace’s appointment comes at a crucial time for MFSA. It is currently busy clearing approvals for several cryptocurrency agents called “Virtual Financial Agents” (VFA). At least 29 businesses have applied for the license. Expected to be approved by the end of the month, these VFA agents are expected to submit applications for operators like exchanges, wallets, and initial coin offerings.

TM noted that crypto operators have been stuck in a bind as traditional banks have been reluctant to provide services to them while they await their MFSA licenses.

At the beginning of this year, The Crypto Sight reported that the International Monetary Fund had called on Malta to beef up its enforcement against crypto money laundering risks.  

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