Matters to be stated in a White Paper

The Government of Malta has on the 22nd May 2018, published three bills entitled “Virtual Financial Assets Act”, “Malta Digital Innovation Authority Act” and the “Innovative Technology Arrangements and Services Act”. 

The proposed VFA Act, outlines the requirements when offering VFAs to the public as well as outlines the information which must be included in a White Paper.  The White Paper is a document which is presented to the public upon the issue of VFAs, explaining the purpose behind an ICO, the manner in which the collected funds will be used and who are the promoters seeking funding.  This ensures that investors are protected while offering investors clarity on the proposed project. 

Every whitepaper must be dated, must state the matters specified in the 1st Schedule to the VFA Act and include a statement by the board of administration confirming that the whitepaper complies with the requirements of Article 3 of the said Act.  No whitepaper shall be issued or published, unless ten working days before the date of its circulation, a confirmation that the whitepaper is in compliance with the Act, signed by a member of the issuer’s board of administration or its agent and the VFA agent appointed in terms of Article 7, has been delivered to the Malta Financial Services Authority (MFSA).  When the MFSA is satisfied that all the requirements of the Act have been complied with, the MFSA will register the whitepaper. 

The whitepaper must contain the information which, according to the particular nature of the issuer and of the VFAs offered to the public, is necessary to enable investors to make an informed assessment of the prospects of the issuer, the proposed project and of the features of the VFA. This information shall be presented in an easily analysable and comprehensible form. 

Certain information may be omitted from the whitepaper if: 

  1. disclosure of such information would be contrary to the public interest;

  2. disclosure of such information would be seriously detrimental to the issuer, provided that the omission would not be likely to mislead the public with regard to facts and circumstances essential for an informed assessment of the prospects of the issuer, the proposed project and of the features of the virtual financial assets to which the whitepaper relates;

  3. such information is of minor importance only for a specific offer and is not information that will influence an informed assessment of the prospects of the issuer, the proposed project and of the features of the virtual financial assets to which the whitepaper relates; or

  4. disclosure of such information is found to be inappropriate to the issuer’s sphere of activity or proposed activity, or its legal form or to the virtual financial assets being offered, in which case the whitepaper shall contain equivalent information when available. 

The whitepaper must be drafted in the English language and in any other languages, at the issuer’s discretion. 

In brief, the white paper, must include the following: 


The whitepaper must include a summary. The summary shall, in brief and non-technical language, provide key information in relation to the offering. The format and content of the summary of the whitepaper shall provide, in conjunction with the whitepaper, appropriate information about essential elements of the VFAs concerned in order to aid investors when considering whether to invest in such VFAs. The summary shall be drawn up in a common format in order to facilitate comparability of the summaries of similar VFAs and its content should convey the key information of the VFAs concerned in order to aid investors when considering whether to invest in such VFAs. 

The persons responsible for the whitepaper 

The names, functions and declarations by the persons responsible for the whitepaper that to the best of their knowledge the information contained in the whitepaper is in accordance with the facts and that the whitepaper makes no omission likely to affect its import. 

The offer to the public 

The following information must be provided in the White Paper. 

  1. a description of the reason behind the initial VFA offering;

  2. a detailed technical description of the protocol, platform and, or application and the associated benefits;

  3. a detailed description of the sustainability and scalability of the proposed project;

  4. the associated challenges and risks as well as mitigating measures thereof;

  5. a detailed description of the characteristics and functionality of the VFAs being offered;

  6. a detailed description of the issuer, VFA agent, development team, advisors and any other service providers that may be deployed for the realisation of the project;

  7. a detailed description of the issuer’s wallet/s used;

  8. a description of the security safeguards against cyber threats to the underlying protocol, to any off-chain activities and to any wallets used by the issuer;

  9. a detailed description of the life cycle of the initial VFA offering and the proposed project;

  10. a detailed description of the past and future milestones and project financing;

  11. a detailed description of the targeted investor base;

  12. the exchange rate of the VFAs;

  13.  a description of the underlying protocol’s interoperability with other protocols;

  14. a description of the manner funds raised through the initial VFA offering will be allocated;

  15. the amount and purpose of the issue;

  16. the total number of VFAs to be issued and their features;

  17. the distribution of VFAs;

  18. the consensus algorithm, where applicable;

  19. the incentive mechanism to secure any transactions, transaction and/ or any other applicable fees;

  20. in the case of a new protocol, the estimated speed of transactions;

  21. any applicable taxes;

  22. any set soft cap and hard cap for the offering;

  23. the period during which the offer is open;

  24. any person underwriting or guaranteeing the offer;

  25. any restrictions on the free transferability of the VFAs  being offered and the DLT exchange/s on which they may be traded, to the extent known by the issuer;

  26. the methods of payment;

  27. a specific notice that investors participating in the initial VFA offering will be able to get their contribution back if the soft cap is not reached at the end of the offering and detailed description of the refund mechanism, including the expected time-line of when such refund will be completed;

  28. a detailed description of the risks associated with the VFAs and the investment therein;

  29.  the procedure for the exercise of any right of pre-emption;

  30. A detailed description of the smart contract/s, if any, deployed including the adopted standards, its/their underlying protocol/s, functionality/-ies and associated operational costs;

  31.  if any smart contract/s is/are deployed by the issuer, details of the auditor who performed an audit on it/them; 

  32.  a description of any restrictions embedded in the smart contract/s deployed, if any, including any investment and/or geographical restrictions;

  33. the program agents used to obtain data and verify occurrences from smart contracts (also known as ‘oracles’) used and detailed description of their characteristics and functionality thereof; 

  34. any bonuses applicable to early investors including any discounted purchase price for VFAs;

  35. the period during which voluntary withdrawals are permitted by the smart contract, if any; 

  36. a description of the issuer’s adopted white-listing and anti- money laundering and counter financing of terrorism procedures in terms of the Prevention of Money Laundering Act and any regulations made and rules issued thereunder; 

  37. any intellectual property rights associated with the offering and protection thereof; and

  38. the methods of and time-limits for delivery of the VFAs. 

The MFSA will have the power to waive or modify any of the above requirements within the context of a particular initial VFA offering or a particular application for admission to trading on a DLT exchange. 

Details of the issuer 

These include the name, the registered address and registration number, the date of registration, the issuer’s object(s) and where applicable, the group of undertakings to which the issuer belongs.  Furthermore, insofar as they are known, an indication of the members who directly or indirectly exercise or could exercise a determining role in the issuer’s administration must be included. 

The issuer’s principal activities 

A description of the issuer’s principal activities, including the disclosure of any legal proceedings having an important effect on the issuer’s financial position. 

The issuer’s board of administration 

The White Paper must include the names, addresses and functions of the administrators.

 Benefits for third parties and other expenditure 

The White Paper must include the amounts or estimated amounts of the preliminary expenses incurred and expenses incurred for the issue as well and the persons by whom any of those expenses have been paid or are payable.  The White Paper must also include the amounts or benefits intended to be paid or given to the VFA agent or any person endorsing the offering, and the consideration for the payment or the giving of the benefit. 

The issuer’s financial track record 

Where the issuer has been established for a period exceeding three years, details of its financial track record must be provided in the White Paper.

The validity of a Whitepaper, Arrangements for Approval and Publication of a Whitepaper 

A whitepaper shall be valid for 6 months after its approval by the MFSA for offers to the public. The MFSA will not register a whitepaper unless it is satisfied that the whitepaper has been drawn up in accordance with the Act and any regulations made thereunder.  The MFSA will notify the issuer or the VFA agent, of its decision regarding the approval or otherwise of the whitepaper.

 Significant new factors, material mistakes or inaccuracies 

Every significant new factor, material mistake or inaccuracy relating to the information included in the whitepaper which is capable of affecting the assessment of the virtual financial assets and which arises or is noted between the time when the whitepaper is approved and the final closing of the offer to the public, whichever occurs later, shall be mentioned in a supplement appended to the whitepaper. Such a supplement shall also be approved and published in the same manner as the original white paper. Investors who would have already agreed to purchase or subscribe for the virtual financial assets before the supplement is published shall have the right to withdraw their acceptance within two working days after the publication of the supplement, provided that the new factor, mistake or inaccuracy arose before the final closing of the offer to the public and the delivery of the virtual financial assets. 

How can we help? 

We shall be publishing updates about blockchain, DLT and ICOs regularly and encourage you to get in touch with us if you would like us to keep you duly updated about regulatory development in this area.  If you would like to receive such updates, or if you have any query on blockchain and ICOs, please contact us on [email protected].  

For a complete list of services which we can offer in relation to ICOs, please click on the following link

Apart from its offices in St. Julian’s Malta, ACT operates from a second office in Gozo, which is situated in the capital city of Victoria.  For an appointment in our Gozo office, please call on 00356 21378672 or send us an email on [email protected].  


This article contains general information only and is not intended to address the circumstances of any particular individual or entity. ACT, by means of this article is not rendering any accounting, business, financial, investment, legal, tax, or other professional advice or service. This article is not a substitute for such professional advice, nor should it be used as a basis for any decision or action that may affect your finances or your business. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. Before making any decisions or before taking any action that may affect your finances or your business, you should consult a qualified professional adviser. ACT shall not be responsible for any loss whatsoever sustained by any person who relies on this article.  


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