Chiliz Secures In-Principle Approval for Digital Asset Services in Malta

Chiliz, a prominent blockchain company, has announced a significant regulatory achievement for its SportsFi platform, Socios.com. On October 25, 2024, the Malta Financial Services Authority (MFSA) granted in-principle approval for Socios.com to offer digital asset services, marking a pivotal step in the platform’s compliance journey within the European Union.

Achieving Class 3 VFAA License

The approval allows Socios.com to operate as a regulated virtual financial asset (VFA) provider under Malta’s established regulatory framework.

• License Details: The in-principle approval grants Socios.com a Class 3 Virtual Financial Assets Act (VFAA) license, enabling it to provide a variety of VFA services.
• Limitations: However, it is important to note that this license does not permit Socios.com to operate a VFA exchange.

With this license, Socios.com can hold or control client assets, thereby offering a range of services within a regulated environment. Alexandre Dreyfus, CEO of Chiliz and Socios.com, described the approval as a “milestone” for the Chiliz Group, underscoring their commitment to regulatory compliance and transparency in the blockchain sector.

Commitment to Regulatory Compliance

Chiliz’s recent approval is part of a broader strategy to ensure compliance across various jurisdictions. The company has already adhered to UK financial promotion regulations and secured virtual asset service provider authorization in Lithuania.

• Global Registration Efforts: Socios.com is actively pursuing registrations in several countries, including Indonesia, Spain, and Italy.
• Alignment with MiCA: These compliance measures are in line with the upcoming European Union’s Markets in Crypto-Assets Regulation (MiCA), which aims to strengthen the regulatory framework for digital assets across the region.

Dreyfus emphasized the importance of high regulatory standards in fostering trust among stakeholders within their ecosystem, reflecting a proactive approach to compliance.

Malta’s Role in the Crypto Regulatory Landscape

Malta has established itself as a leader in cryptocurrency regulation, having introduced the Virtual Financial Assets (VFA) framework in 2018. The MFSA has been working to align its regulations with the EU’s MiCA framework, which is set to take effect by December 2024.

• Public Consultation: In September 2023, the MFSA conducted a public consultation to gather feedback on proposed regulatory changes, including the requirement for crypto providers to establish an “orderly wind-down plan” for structured business discontinuation.
• Attracting Other Firms: Malta’s regulatory environment has attracted other firms as well, such as OKX, which selected Malta as its hub for MiCA compliance within the EU. OKX is leveraging its existing Class 4 license to provide a wide range of VFA services under stringent regulatory guidelines.

Chiliz’s approval not only enhances its operational capabilities but also reinforces Malta’s position as a favorable jurisdiction for cryptocurrency businesses seeking regulatory clarity and compliance.

Looking Ahead: The Future of Socios.com

With the in-principle approval from the MFSA, Socios.com is well-positioned to expand its offerings in the digital asset space. The commitment to regulatory compliance and transparency will likely play a crucial role in building trust with users and stakeholders alike.

As the landscape of cryptocurrency regulation continues to evolve, Chiliz’s proactive approach to compliance and its strategic positioning in Malta could serve as a model for other companies navigating the complexities of the digital asset market.