Muscat’s Wild West: Blockchain, Cannabis, AI, Montenegro, Albania, Azerbaijan.

Russian, Azeri, Chinese money – and no regulation.

“I would go as far as to say that Malta is the Silicon Valley of the Mediterranean. A startup in Malta has a very strong chance of making it because politicians and other entrepreneurs are a phone call away. It’s very easy to get things done in Malta,” said Eman Pulis, organizer of Malta’s Blockchain Summit events, Malta’s premier crypto conference.

Yes, we’ve seen how easy it is to get things done in Malta.

From passport agents boasting that they have direct lines to, or are bosom buddies with, Prime Minister Joseph Muscat, Justice Minister Owen Bonnici, and Parliamentary Secretary for Citizenship Julia Farrugia.

To the son of the late Paceville entrepreneur Hugo Chetcuti, Luke, boasting about his own direct line to Minister for Economy Chris Cardona and Minister for Tourism Konrad Mizzi. We can also safely assume that Luke Chetcuti has a direct line to the Prime Minister himself, because the Prime Minister is prepared to inaugurate his hotel when it hasn’t got a license to operate.

So yes Eman Pulis paints a very accurate picture of the Labour government as being a movement of criminals helping out business in exchange for something. Of course, this is what Eman had hoped to benefit from all along. After all, he has been a brown-nosing Labour climber for a while.

But what good are corrupt “business friendly” ministers to Crypto when there are no banks willing to serve Malta’s crypto community?

Aside from corrupt ministers, Crypto and Blockchain do not enjoy support from banks, and the reason is outlined by the Moneyval report:

I was having a chat with Twitter’s one-man/woman, lawyer/investigative reporter/detective BugM who outlined where we’re at now with the whole Crypto thing. A lot of what I reproduce below is verbatim what BugM has assessed.

  1. BugM pointed out to me how Crypto was partly the result of a PR overload to compensate for the reputational damage caused by Daphne’s assassination under this government’s watch.
  2. They started a stampede by telling crypto and blockchain business to set up shop in Malta by a particular date and enjoy regulation and tax exemption for a year.
  3. The thing is that the crypto is notoriously averse to regulation. They were never going to comply with the rules laid out anyway.
  4. So once this truth caught up with the PR, and once other super regulators like Moneyval started taking a cold hard look at the rules, the government over-compensated by going on overdrive to impose rules.
  5. Now in a situation were some crypto/blockchain businesses ran away, others just upped and left once the deadline approached ,and others don’t give a toss and will operate however they want anyway.

The regulator, ultimately, doesn’t have teeth – especially if it either doesn’t understand the space or if they have Keith Schembri / Silvio Schembri’s ear.

With crypto, the MFSA is shit scared no one will apply and they will lose face / have a massive problem on their hands so they sneakily extended the deadline.

Originally in 2018, a crypto exchange needed to file a full application by the 31st of October 2019.

When they realised no one was going to, the deadline was changed to needing to file a letter of intention to apply by 31st October, and then file an application within 6 months from that.

Here is a spreadsheet provided by BugM listing 200 Crypto currencies that set up shop in Malta upon the Maltese government’s invitation.

You’ll notice too that Nexia BT, interestingly, was the first to set up:

Yet as of November 1st only 21 Crypto companies have requested a license.

The cycle has since started again with AI, and again with medical cannabis. Each are what you’d call PR friendly areas – a lot of hype but poorly understood.

In short you have an administration wildly throwing its lot – and Malta’s reputation and future – into areas that haven’t been fully examined or risk-assessed. Be it Crypto, AI, Cannabis, they’re all PR exercises and gateways to Russian/Chinese/Azeri money.

And aside from inviting unchartered and unregulated business into the island, Muscat is actively uniting with corrupt administrations – strengthening bonds with them. When it’s not Azerbaijan, it’s Albania or more recently Montenegro.

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