Sarah Pulis, Head Conduct Supervision at the MFSA, on Consumer Protection in Digital Finance at Malta's GRC & ESG Conference

The Head of Conduct Supervision at the Malta Financial Services Authority (MFSA) Sarah Pulis sat down with Business News Malta to discuss emerging challenges in cryptoasset markets and the balance between innovation and consumer safeguards. This is ahead of her moderating a session titled “Digital Finance: Emerging Consumer Protection Concerns” at the Governance, Risk, Compliance and ESG Conference 2026, co-hosted by MFSA and Malta Stock Exchange (MSE).

1.      Tell us more about your role at the MFSA and why you will be moderating this panel on the intersection between consumer duties and digital finance.

I head the Conduct Supervision function at the MFSA, where my team works to ensure regulated entities treat consumers fairly across the financial services sector. Over twenty years in regulation, I have had the opportunity to work in the supervision of various types of financial services providers , and to represent the Authority on committees within both ESMA and EIOPA. That experience has given me a good grounding in how consumer protection frameworks are evolving, particularly as digital finance introduces new ways of designing and delivering products. I am looking forward to exploring these questions with our panellists.

2.     You're moderating a panel on consumer protection concerns from digital finance at the GRC & ESG Conference. What are the most pressing issues facing consumers in crypto-asset markets?

The crypto-asset space presents a unique constellation of risks that demand careful regulatory attention. Fraud and misrepresentation remain significant concerns, particularly given the complexity of these products and the asymmetry of information between providers and consumers. We're also seeing substantial volatility that many retail investors may not fully comprehend, custody risks where consumers don't always understand who holds their assets or under what conditions, and transparency issues around fees, conflicts of interest, and the actual nature of what's being offered. These aren't hypothetical concerns, they're challenges we're actively addressing through our supervisory work.

3.     How has the regulatory landscape evolved to address these specific challenges?

The Markets in Crypto-Assets Regulation (MiCA) has provided a comprehensive framework that standardises requirements across the EU, which is crucial for a sector that operates across borders. We've seen significant emphasis on disclosure requirements, ensuring that consumers receive clear, accurate information about the risks they're taking. There are specific safeguards around custody arrangements, operational resilience, and conduct standards designed to prevent misconduct. Malta is unique since it had already introduced and enforced a regulatory framework for crypto-asset service providers (CASPs) under the Virtual Financial Assets (VFA) Act in 2018. We therefore already had experience in translating consumer protection rules into meaningful protection when MiCA was rolled out and we will continue to work on this front. 

4.     Malta licenses CASPs with global customer bases. How does the MFSA approach consumer protection when most consumers aren't Maltese?

This is an important question, and the answer is straightforward: the same rules apply regardless of where the consumer is located. Whether you're a consumer in Malta, or elsewhere in the EU, if you're dealing with a Malta-licensed CASP, you're entitled to the same protections under our regulatory framework. We don't make distinctions based on geography. It's also important that complaints mechanisms are accessible, consumers need to to be aware of the fact that they may submit any complaints arsiing from their interactions with Malta-licensed CASPS with the Office of the Arbiter for Financial Services.

5. The panel examines balancing innovation with consumer protection. Where should regulators draw the line?

This is the central tension in regulating digital finance. We want to enable innovation. Malta has demonstrated its commitment to being a jurisdiction that embraces technological advancement. But innovation cannot come at the expense of consumer protection or market integrity. The balance lies in regulation that's proportionate and risk-based, that allows legitimate innovation to flourish whilst maintaining robust safeguards against harm. It means being agile enough to understand new business models whilst being firm on fundamental principles: transparency, fairness, and accountability. The framework should be strong where it needs to be, particularly around consumer-facing activities, whilst avoiding unnecessary barriers to genuine innovation.

6. What should delegates take away from this panel discussion?

I hope the panel provides practical insights into how regulators, industry, and consumer advocates can work together to build a digital finance ecosystem that's both innovative and safe. Consumer protection in crypto-assets isn't about stifling the sector, it's about ensuring it develops sustainably, with trust and integrity at its foundation. The challenges are real, but so are the opportunities to get this right through thoughtful regulation and responsible industry practice.

The Malta Stock Exchange GRC & ESG Conference will take place from 4-6 March 2026 at the Hilton, Milton. Further information, including the full agenda, is available at grcweekmalta.com