Malta enacted an innovative legal framework regulating virtual currencies in 2018 (defined as VFAs), distributed ledger technologies (DLTs), including blockchains, initial coin offerings (ICOs), and providers offering services in relation to VFAs.  The legislator also created a mechanism regulating innovative technology arrangements (ITAs), such as smart contracts, and innovative technology service providers (ITSPs). The framework also sought to go beyond the concept of cryptoassets and created a certification mechanism for ITAs, such as smart contracts. – The VFA Act created the Financial Instrument Test, which is intended to assess whether a DLT asset qualifies as a virtual token, a financial instrument, electronic money or VFA. – Where a DLT asset qualifies as a virtual token, its offering is not regulated under Maltese law. On the other hand, the issuing of VFAs and the offering of services in relation to VFAs are regulated under the VFA Act. – The issuing and offering of services in relation to financial instruments and electronic money are primarily regulated under MiFID II and the Electronic Money Directive, both as transposed under Maltese law. – Issuers of VFAs and VFA service providers are required to obtain authorisation/licensing from the MFSA prior to commencing any activity and are also deemed to be subject persons for AML/CFT purposes.