Malta’s MFSA is calling out dishonest crypto companies

Malta’s MFSA is calling out dishonest crypto companies

  • Malta's financial authority recently published warnings against two of the country's crypto exchanges that are operating without a license.
  • The exchanges, COINMALEX and Crypto Foxtrades, made false claims that they were fully regulated and licensed by the MFSA.
  • The regulator also recently revealed that Binance is not a Malta-based or Malta-regulated crypto exchange, and that it never operated from the country.

Malta’s financial regulator, the MFSA (Malta Financial Servies Authority) recently issued warnings against two crypto exchanges within the country. The exchanges in question are Crypto Foxtrades and COINMALEX.

The two exchanges made false compliance claims

According to the announcements, both of these exchanges are misleading their users through claims that they were fully registered and licensed in Malta. The MFSA claims that this is not the case.

Furthermore, the exchanges were clearly trying to deceive. One of them — COINMALEX — posted a document, allegedly issued by the Malta Business Registry. While this is a real institution within the country, the document itself features a British royal coat of arms. Yet, this coat of arms has not been in use for over 55 years, ever since Malta itself gained independence from Britain (1964)

The other exchange, Crypto Foxtrades, also published false claims on its website. The exchange said that it has a license to operate as a Category 3 Investment Services Provider by the MFSA. While this category does exist, the MFSA denied providing such a license to this exchange.

These warnings are only the latest ones in a long line, which even includes one of the world’s largest crypto exchanges, Binance. According to the MFSA’s statement in February, Binance’s claims that it a Malta-based exchange are also untrue. In fact, the exchange never operated from this country, and the MFSA has never regulated it.

Binance is not Malta-based, after all

The revelation, which was rather shocking to a lot of Binance users, came only about a month ago, in February 2020.

Binance’s CEO, Changpeng Zhao, responded to the announcement on February 21st. He said: “There is a mix of truth, FUD & misconception. Binance.com is not headquartered or operated in Malta. This is old news & has always been the case, hence there is quite a bit of FUD turning this into a breaking story. The community’s comments show that understanding.”

Zhao continued by explaining that people are not used to the ‘new world with blockchain,’ in which offices, HQs, and alike are not necessary. He also added that Binance has a number of regulated entities around the world. It works with them closely to ensure compliance with the rules of the regions in which it has subsidiaries and offices.

As for Binance.com itself, Zhao claims that it has always operated ‘in a decentralized manner.’ Binance currently offers its services to users in over 180 countries. Also, it aims to become a true Decentralized Autonomous Organization (DAO).

By Ali Raza
A journalist, with experience in web journalism and marketing. Ali holds a master's degree in finance and enjoys writing about cryptocurrencies and fintech. Ali’s work has been published on a number of cryptocurrency publications. Raza is the co-founder of 5Gist.com, too, a site dedicated to educating people on 5G technology.

Investing is speculative. When investing your capital is at risk. This site is not intended for use in jurisdictions in which the trading or investments described are prohibited and should only be used by such persons and in such ways as are legally permitted. Your investment may not qualify for investor protection in your country or state of residence, so please conduct your own due diligence. This website is free for you to use but we may receive commission from the companies we feature on this site. Click here for more information.