What are Sports Tokens?
The ever-expanding world of cryptocurrency has recently taken its turn to enter into the popular and lucrative world of sport. News recently struck that a transfer of the highly renowned and talented football player Lionel Messi from the Spanish team of Barcelona to the French team of PSG was completed with an inclusion of a significant amount of cryptocurrency fan tokens as part of the player’s welcome package.
Sports Tokens or as some refer to them, fan tokens are a special type of cryptocurrency which is customised for the specific type of sport. Fans who subscribe to these tokens will gain access to a vote on some of their club’s minor decisions and may receive other discretionary rewards.
Although some might deem these tokens as a way for the already profitable sports clubs to get a new source of revenue and to generate more income, others see this as an opportunity to invest in these tokens in order to trade them when the opportune time arises, trying to make a profit from such trades. Nonetheless, the fact that these are cryptocurrency tokens means that they are bound to the notorious fluctuations in prices making them also subject to potential losses.
VFA Framework in Malta
Malta is one of the first European Union countries to establish a Virtual Financial Assets (“VFA”) framework through the regulation of blockchain and Distributed Ledger Technology (“DLT”). Through the enactment of its three main legislative frameworks, Malta has become one of the leading countries in this sector. The legislative frameworks consist of the following:
- The Virtual Financial Assets Act (“VFA Act”), which inter alia, creates legal certainty as to the classification of every DLT asset, provides a licensing regime, and a regulated environment to firms providing services in relation to DLT assets;
- The Innovative Technology Arrangement and Services Act (“ITAS Act”) – which regulates the recognition and certification of DLT platforms and smart contracts, providing a tangible proof of quality and standards maintained by the relevant DLT platforms; and
- The Malta Digital Innovation Authority Act (“MDIA Act”) – which establishes a new central authority, the MDIA, responsible for the certification of technology arrangements and for the registration of their service providers, and for the promotion and oversight of utilisation of DLT.
The Maltese VFA framework and Sports Tokens
Malta is an ideal forum for issuing Sports Tokens due to the above-mentioned, highly extensive VFA framework. Malta also hosts several service providers having expertise in DLT which can be made use of by potential issuers in their pursuit of issuing Sports Tokens.
Through the Maltese VFA framework, an issuer may draw up a whitepaper which will be registered with the MFSA and which shall comply with the requirements set out in the VFA Act. By doing so, the whitepaper will include sufficient information to enable investors to make an informed decision if it includes details on the prospects of the issuer, the proposed project, and the salient features of the VFA. Ultimately this will allow Sports Tokens to be issued and made use of by those interested parties through Malta’s VFA framework.
We invite you to contact us should you require any additional information or assistance on the above.