The legal status of cryptocurrencies in the European Union

Abstract

Almost 10 years ago, under the pseudonym ‘Satoshi Nakomoto,’ the world’s first cryptocurrency – bitcoin – was created. Ever since, a multitude of other cryptocurrencies have erupted into the mainstream, and, in an overall story of tremendous growth, by April 2018, around 1584 cryptocurrencies exist.1 While bitcoin remains the most popular example of cryptocurrency and the largest in terms of market capitalisation,2 the author considers that, in light of the rapid developments in the blockchain space, it is no longer appropriate to focus primarily on bitcoin (as previous similar theses have done). Therefore, when exploring the concept of cryptocurrencies this work considers also ‘altcoins’ which present an alternative to bitcoin, and the ‘tokens’ currently being issued through Initial Coin Offerings (ICOs).

This short thesis sets out to determine the influence of cryptocurrencies on the harmonised legal framework of the EU in general, and, on the Maltese jurisdiction in particular. A comparative analysis is indispensable for this write-up as the author will assess the divergent legal treatment of cryptocurrencies, and the so-called ‘tokens,’ across a select number of EU Member States.

Due to the constant state of flux in the regulatory landscape, the author felt it necessary to implement an information-collection cut-off date set at 19 April 2018.