Less than a year ago, Malta looked set to become the most blockchain friendly nation in the world, as it passed three new bills into law to help regulate the industry. Since that time things have gone from bad to worse for the blockchain beacon of hope. Projects have pulled out of the country, scams roam free, crypto trading is made almost impossible, and the government has taken to blaming the opposition for the nation’s failings – it’s all looking rather bleak.
DQR Leading the Charge
DQR – once called the company that “will cement Malta’s reputation as the Blockchain Island” – has just fired all 65 members of staff and is freezing its operations in Malta for the foreseeable future. DQR was backed and funded by Genesis Mining, but after a torrid 12 months for the price of crypto, the mining firm has allegedly fallen on hard times and is cutting funding on certain projects.
Interestingly, back in November 2018 at the Malta Blockchain Summit DQR won an award for Careers Program of the Year – it looks like it won’t be winning that award two years running. In addition to this, Genesis Mining won the Mining Initiative of the Year award. The fact that just months after these firms won awards at the Malta Blockchain Summit they both announced financial difficulties looks rather suspicious – to the point where the legitimacy of these award wins are being questioned.
Infighting Between the Political Parties
Never one to miss out on a good old-fashioned quarrel, the two political parties in Malta – PN and PL – started trading blows about Malta’s future as the blockchain island. Kirsty Debono – PN Spokesperson – said, “Instead of spouting empty words, the government should ensure we are not amateurs where it comes to the economy and that due diligence is carried out properly when giving out licenses. We can’t continue denting our reputation and credibility.”
Silvio Schembri’s Secretariat was quick to retort saying that PN refused to take part in the six public discussions about the blockchain laws that came into place, and that PN has no right to criticize the events unfolding due to this. Schembri was instrumental in implementing these blockchain laws, and his rather feeble comeback highlights the real possibility that branding Malta as a blockchain island could have been a poorly thought out PR stunt.
Blockchain Island Vision Has Been Stalling for Some Time
It clear that Malta’s dream of becoming the blockchain island has been falling apart since late October 2018. Maltese banks decline any transactions to crypto exchanges – whether a bank transfer or card purchase is made – due to “company policies.” FullyCrypto spoke to every Maltese bank and all confirmed that it’s currently not accepted for clients to make transactions to crypto exchanges. This makes it very difficult for people residing in Malta to get their hands on crypto without using a foreign bank account or using cash at a Bitcoin ATM. There are workarounds, but they are long-winded and will put off many people from entering the crypto space.
On top of this, people are using ICOs to achieve personal goals in what will inevitably turn out to be a project that “ran out of money”. The Maltese Scudo crypto scam is still active after being reported several times and two-thirds of applicants failed the country’s first crypto agent exam. If this worrying trend continues for much longer, Malta’s future as the blockchain island could be in serious danger.
Back in April 2018, DQR said it planned to employ 200 people in Malta, a figure that likely spurred Schembri to push forward with his blockchain island plans. Now DQR has fallen apart, Malta’s future as the blockchain island hangs in the balance. Large existing firms need to relocate to the island to save its status, but given the fact that other countries around the world are starting to implement their own crypto regulations, Malta could quickly fall to the bottom of the pile.
