MFSA CEO Sets Out Malta's Approach To Crypto Licensing, Perpetual Futures And AI

Kenneth Farrugia, Chief Executive Officer (CEO) of the Malta Financial Services Authority (MFSA), has spoken to Finance Magnates about how Malta's disciplined approach to licensing has helped build one of Europe's most credible jurisdictions for crypto and financial services.

Farrugia framed Malta's approach to licensing under MiCA as prioritising quality over volume: "We're not after numbers, we're after quality, we're after legitimate business." He traced this philosophy back to 2017, when Malta introduced an early crypto regime; of the roughly 200 companies operating from Malta at the time, only 24 applied for a licence, and just half of those were ultimately approved. That gatekeeping approach has carried through to MiCA, under which Malta has issued 22 licences to date, placing it fourth among EU jurisdictions. 

On perpetual futures, Farrugia confirmed that Malta considers products marketed as perps to fall within existing CFD conduct and intervention rules, aligning with ESMA's recent position, provided they meet the CFD definition. On prediction markets, he said the MFSA is still working through how event contracts fit within the MiFID framework, in coordination with the Malta Gaming Authority and ESMA.

Malta is also positioning itself as a forward-looking regulator on AI, among the first jurisdictions globally to issue formal AI expectations for licence holders through a 'Dear CEO' letter. Farrugia described AI as "an opportunity" for both regulators and industry, provided it's underpinned by strong governance, and said the MFSA is building dedicated internal AI capability to match.

Underpinning all of this, Farrugia pointed to talent as Malta's real competitive edge: sustained investment in education, including a dedicated Financial Services Academy and a University of Malta master's in financial regulation and compliance, has helped the MFSA build a genuinely international team.

Read the full interview here.