As MiCA Looms, Fastex Pushes for Regulatory Compliance

What are the three biggest crypto trends of 2024? You could argue the top three trends are regulation, regulation, and regulation. The “Wild West” is no more. Europe’s MiCA framework will soon go into effect. Debates over crypto regulation have spilled into the U.S. presidential election. And one Web3 company is traveling across the globe — quite literally — to show leadership in regulatory compliance: Fastex.

Pick a continent (practically any continent except Antarctica), and there’s a good chance you’ll see a Fastex executive onstage at a Web3 conference, arguing that regulation is both necessary and useful. In September in New York, for example, at the DACOM (Digital Asset Compliance) Summit, Fastex’s Chief Legal Officer, Vardan Khachatryan, suggested that “Compliance is key for the future of crypto.”

Perhaps years ago that would sound outlandish — especially in the heyday of free-wheeling exchanges like Mt. Gox — but now the industry heavy-hitters can appreciate the merits of clarity. Fastex isn’t alone. Khachatryan was joined on the DACOM panel by industry leaders from Binance, Polygon Labs, Paxos, and Solidus Labs. “Fastex is taking steps to meet the regulatory requirements of various markets,” Khachatryan said, “including applying for licenses in the U.S. and working under the MiCA framework for the European market.”

It turns out Khachatryan was prescient. Just weeks after this event, Fastex received in-principle approval for a VFA Category 4 License from Malta’s MFSA. There are a ton of TLAs (Three Letter Acronyms) in that sentence, so here’s what it means and why it matters: MFSA is Malta’s Financial Services Authority, and the VFA license is for Virtual Financial Assets — essentially cryptocurrencies. This enables Fastex to offer tools and services (such as the Fastex Exchange, Fastex Wallet, Fastex Card, and ftNFT platform) to both retail and institutional investors, and do it in a way that gives consumers confidence and peace of mind.

Malta has long had a forward-thinking, innovative approach to blockchain regulation, which is why Fastex tapped it as its preferred jurisdiction. “We are proud to receive in-principle approval from the MFSA for our VFA Category 4 License, marking a pivotal step in Fastex’s regulatory journey,” said Khachatryan. “This approval reinforces our dedication to meeting the highest regulatory standards as we prepare for a seamless transition to MiCA by the end of 2024.”

The license from Malta is part of a broader trend: More countries, more licenses, more trust, more adoption. Fastex already secured initial approval from the Virtual Assets Regulatory Authority (VARA) of Dubai, and also key registrations in Lithuania. Meanwhile, Fastex (and much of the crypto space) races to ensure compliance to the European Union’s MiCA framework (Markets in Crypto-Assets Regulation), which goes into effect in December 2024.

So why does all this matter? Pick another continent and another web3 conference, and you’ll get more insights from Fastex. Take Dubai. “FinTech and blockchain are making financial services more accessible and efficient,” said Fastex CEO Vakhtang Abrahamyan at the Future of Blockchain Summit. He then added, “But for these technologies to achieve their full potential, compliance and security need to remain a top priority.”

Abrahamyan’s point is that no matter how wondrous or exciting cryptocurrency might be, if there’s a lack of trust — at both the retail and institutional level — mainstream adoption will stall. People need to trust crypto to use it, and regulatory compliance brings that trust.

Vardan Khachatryan hammered home that point in a keynote speech at the Future Blockchain Summit, titled “Navigating the New Era of Crypto Regulation: Opportunities and Challenges Under MiCA.” The irony is that MiCA itself might be confusing to newbies, but at the end of the day it’s all about clarity, and clarity is precisely what the industry needs. This is because clarity is what the consumer needs.

“The whole idea of regulation is to protect the consumer,” said Khachatryan. He then zoomed out for some much-needed perspective. “Only 5% of the global population has adopted crypto,” said Khachatryan. “We have this 95% opportunity of growing even more.”

Khachatryan is a realist. In the speech he acknowledged that regulation will include challenges that could be tricky for startups — things like new reporting demands, cold storage requirements, and capital reserves for stable coins. But these headaches are worth it. MiCA “provides legal certainty for business,” said Khachatryan. “It helps innovation, as generally, investment firms and funds don’t invest in places where there’s uncertainty. This will have a huge impact on new funds, new money.”

In a sense, MiCA serves both a literal and symbolic function for the web3 space. On a literal level, it snaps into focus the regulation throughout Europe, which used to be different and confusing on a country-by-country basis. Now, as Khachatryan puts it, MiCA “harmonizes rules across EU member states.” The market will be less fragmented.

And on a symbolic level, the hope is that more of the globe — including the United States — can learn from the example of MiCA, and work to harmonize regulation across the planet. It’s not perfect but it’s a start. As Khachatryan said in Dubai, “MiCA is a huge step forward for the crypto space.”

Learn More about the Fastex ecosystem here.