Distributed Ledger Technologies – The Seven Dimensions

Introduction

As the DLT Leader at KPMG in Malta I can gauge that executives are just starting to realize that blockchain equals opportunity for their businesses. Through its vast, and still largely untapped potential, blockchain may significantly streamline enterprise processes, reduce time and document-intensive transactions, and generally clean up the clearing house. Please join us for the second lecture series held by KPMG Learning Academy in conjunction with the Malta Stock Exchange Institute dedicated to blockchain where KPMG professionals will discuss a variety of topics commencing with Blockchain explained, and moving to regulatory, AML/CFT, accounting, audit, tax and legal aspects, all by reference to world examples of uses of blockchain.

Juanita Brockdorff
Partner
Tax Services

 

Session 1: An Introduction to DLTs

– The Blockchain concept explained
– Bitcoin – the best known cryptocurrency and its fundamentals
– Ethereum – a decentralised platform that runs smart contracts
– Basic cryptography – the process of converting ordinary information into unintelligible form
– Cryptocurrencies – essentially, digital assets designed to work as a medium of exchange
– Smart contracts – digitally facilitating, verifying, or enforcing the negotiation or performance of a contract
– Consensus algorithms – their value in the world of crypto
– Mining is a validation of transactions

Lecturer: Ryan Falzon

Ryan Falzon

 

 Session 2: Rules of engagement for VFA Agents, IVFAOs and VFA Service Providers

– Brief synopsis of the VFA regime and the local market
– Understanding the various players operating in the Sector, and the need for these players
– Understanding the duties and obligations of VFA Agents, Issuers and Services Providers
– Understanding how an STO operates in the context of the current IVFAO
– Current challenges faced by VFA Agents, Initial Virtual Financial Asset offerings, and VFA Services Providers

Lecturer: Mark Curmi

 

Session 3: Use Cases of DLT – An Exploration of its Nascent Potential

– Context: Salient features of DLT, its types, the problems it solves, and the great obsolescence it brings.
– Monetary policy and Gold 2.0.
– Global decentralized computation: Turning digital data into programmable property.
– Decentralized Finance
– DLT in enterprise. B2B use cases across corporations.
– DLT in governance: From smart contract to smart app to decentralized autonomous organizations.
– Convergence – DLT + IoT + Machine Learning
– DLT and Government – execution, not legislation nor adjudication.

Lecturer: Joseph Anthony Debono

Joseph Anthony Debono

 

Session 4: The AML/CFT Dimension to Virtual Financial Assets

-Introduction – What is DLT and Cryptos
-Risks, Challenges and Countermeasures:- FATF/Basel- 5AMLD
-IPs VFAs and the VFA Act
-Use of DLT in the AML space
-Case studies

Lecturers:

Alex Azzopardi                              Deborah Cassar                   Ariane Azzopardi

        

 

Session 5: Cryptoassets: Accounting Implications

– Common types of cryptoassets
– IASB’s current position on cryptoassets
– Accounting literature of relevance to cryptoassets
– Classification of cryptoassets from the issuer’s point of view
– Classification of cryptoassets from the holder’s point of view
– Accounting for rights and obligations attached to cryptoassets
– Accounting considerations relevant to trading platforms
– Accounting considerations relevant to ICOs

Lecturers:

Jonathan Dingli                     Vanessa Grech

   

 

Session 6: Cryptoassets and DLTs: Audit Considerations

– Specific audit issues
– What makes DLT-centric clients particular in auditing
– Which audit areas are most interesting?
– Regulatory aspects of auditing DLTs
– The current scene in auditing DLTs
– Probable future developments
– Specific standards that need to be adhered to
– Current framework (both local and overseas)
– Audit, reviews and special frameworks
– Advantages and opportunities of DLTs when auditing

Lecturers: Claude Ellul                   Christopher Azzopardi

Claude Ellul      Chris Azzopardi

 

Session 7: Cryptoassets: Tax Issues

– General tax principles to be adhered to
– The definition of cryptoassets for tax purposes
– How to categorise cryptoassets for tax purposes
– Tax on capital gains on the transfer of cryptoassets
– Duty on the transfer of cryptoassets
– General VAT treatment of cryptoasset transactions
– Specific income tax, duty and VAT implications for mining, issues and exchanges
– Examples of a typical corporate structure for an issue/ exchange setup and the overall tax impact

Lecturer: Trudy Muscat

 

Venue

KPMG Learning Academy
23, Vincenzo Dimech Street
Floriana FRN 1502
Malta

Course Features

  • Guided Learning 17.50 hours
  • Language English
  • Assessments Not Applicable
Ryan Falzon

Software Developer

Ryan joined KPMG as a full-time software developer upon successful completion of his B.Sc (Hons.) in IT in 2018. He carried out research in the field of bioinformatics, where he tried to optimize the categorization of protein sequences using graph databases. Ryan first started off in developing internal applications for KPMG in Malta and later started researching about the DLT space. In 2019, Ryan acquire the Microsoft Certified Solutions Developer and Associate certificates. He now forms part of the client-facing team that handles development of blockchain audit tools specifically when it comes to crypto-currency exchanges. Ryan is currently pursuing a multi-disciplinary Masters in DLT technologies focussing on the IT stream. He is fluent in several technologies, primarily .Net Languages, Python, AngularJS, React, Solidity, HTML and JavaScript.
Mark Curmi

Director

Mark is a Director in the firm responsible for the Banking, Financial Institutions and VFA advisory services arm of the Malta practice. He holds a Bachelors’ degree in Banking, with Honours in Management from the University of Malta, and has in excess of twelve years of local and international banking experience. Mark joined KPMG in 2014, to drive the Banking Service offering across Audit, Tax and Advisory within the firm. His role within the firm is also one of an industry specialist, which has seen him at the forefront of some major engagements, including advice with disposals and acquisitions of Banks and Financial Institutions, licencing of new Credit and Financial Institutions, ongoing regulatory advice and assistance, and, assignments related to the emerging fields of financial technology and Virtual Financial Assets Mark represents the local practice at KPMG’s ECB Office in Frankfurt and forms part of KPMG’s Global DLT Working group. He has lectured in external and internal fora, both locally and internationally.
Joseph Anthony Debono
Joseph Anthony Debono is a Blockchain/Emtech consultant for Zeta, a Financial and Corporate Service Provider based in Malta and the UK, and has been active in this space since 2016. He is also an academic researcher in this field, focusing on native fintech solutions and business innovation. Moreover, he is a writer whose latest publication, co-edited with fintech pioneer Patrick L. Young, is “DLT Malta: Thoughts from the Blockchain Island”. He also writes a regular column on DLT on Coin Rivet.
Alex Azzopardi
Alex joined KPMG Malta in 2005 after successfully completing his Bachelor of Accountancy (Hons) Degree at the University of Malta. He is an accountant by profession and currently serves as Chairman to the Committee of the Malta Forum for Internal Auditors. He obtained extensive experience in auditing, risk consulting advisory, internal audit, and AML. Alex has worked on a number of AML-related assignments including ones whose objective was to determine alignment with requirements and good practice as well as larger projects designed to assist clients to enhance their controls following their visits by the Regulator. Alex has been involved in assignments within a number of sectors including Gaming, Banking, Financial Institutions, Investment Services and Insurance.
Deborah Cassar

Senior Manager

Deborah is a Senior Manager, AML – Risk Consulting Advisory Services, at KPMG Malta. She holds a Bachelors’ degree in Banking & Finance and Management from the University of Malta. Deborah has over ten years’ experience within the Financial Services sector and worked for over two years with the FIAU. She has worked extensively in the area of AML compliance -performing Compliance reviews, as well as assisting subject persons to establish appropriate AML/CFT internal structures. In 2017, she obtained an international golden standard specialisation with ACAMS as a recognised and Certified Anti-Money Laundering Specialist (CAMS). At KPMG, Deborah works extensively in the areas of Anti-Money Laundering Compliance. She has managed AML projects locally and assisted entities to comply with regulatory obligations specifically on AML/CFT.
Ariane Azzopardi

Associate Director

Ariane is an Associate Director in KPMG Malta’s Quality & Risk Management function. As part of her day to day duties she handles compliance and risk management queries, including those related to the prevention of money laundering and financing of terrorism. She delivers sessions on PMLFT at the KPMG AML roundtable and also delivers seminars at various conferences on related topics. She has experience as MLRO and is a member of the PMLFT sub-committee at the Malta Institute of Accountants and the Institute of Financial Services Practitioners. Ariane is a fellow member of the Malta Institute of Accountants.
Jonathan Dingli
Jonathan leads a team of professionals within the Accounting Advisory Services (AAS) Team as a Partner at KPMG Malta. At KPMG, Jonathan has assisted various local and international clients with respect to IFRS advice and IFRS adoption. Before returning to KPMG, Jonathan set up the Malta Institute of Accountants’ Technical Department which he led for seven years. During his term of office Jonathan wrote a number of technical pronouncements on the application of IFRS to specific local circumstances, was responsible for the drafting of GAPSE and he also represented the Institute on local and international fora. Before joining the Institute, Jonathan also worked as an auditor for a number of years with KPMG in Malta and in Dublin. Jonathan was the editor of the MIA journal the Accountant for seven years. He has lectured on IFRS in various countries, ran various IFRS courses for KPMG and the Malta Institute of Accountants and has given presentations at various events and conferences. He lectures on advanced financial reporting in the Master in Accountancy post-graduate degree at the University of Malta. Jonathan received his Bachelor of Accountancy Honours degree from the University of Malta in 2002. He is a Certified Public Accountant and is also a fellow Member of the Malta Institute of Accountants
Vanessa Grech
Vanessa forms part of the Accounting Advisory Services (AAS) Team as an Advisor at KPMG Malta, where she is responsible for assisting clients across industries, in the preparation of the financial statements in accordance with IFRS and local GAAP rules (including group reporting and consolidation procedures) as well as advising clients on the application of various IFRS matters. Prior to joining KPMG, Vanessa worked within accounting functions in the gaming and investment services industries, where she obtained experience on the preparation of financial reports and management accounts. Vanessa graduated with a Masters in Accountancy Degree from the University of Malta and is a fellow member of the Malta Institute of Accountants.
Claude Ellul
Claude joined KPMG’s Audit function in 2003. He specialises in financial services, particularly in banking and asset management. Claude has also worked at KPMG in Dublin where he has gained experience in the fund sector. Throughout his career at KPMG, Claude has been involved in a number of advisory engagements through which he brought to bear his extensive experience in the financial services sector.
Christopher Azzopardi
Chris currently leads IT Assurance and Attestation services. He heads our IT audit support work for all external financial audit engagements and is responsible for the leveraging of technology within this sphere, including Data and Analytics and Statistical Sampling. Through a dedicated team, he provides assurance over the operating effectiveness of IT controls and substantive testing in supporting statutory financial audits through various technology solutions. Chris has a keen interest in Distributed Ledger Technologies (DLTs). He leads KPMG Systems Audit services and dedicated teams as required for the certification process by the Malta Digital Innovation Authority (MDIA), and is also actively involved in fora on DLT assurance related services within KPMG internationally.
Trudy Muscat

Senior Manager

Trudy, a lawyer, joined KPMG as a tax advisor in 2013. Trudy focuses on the application and interaction of Maltese and European corporate and fiscal legislation in local and cross-border scenarios. She has worked in tax law with international clients for 10 years, assisting both personal and corporate clients to improve their tax efficiency sustainably, particularly in light of the OECD BEPS Project and EU developments. Trudy coaches a team of lawyers focused on fiscal and corporate law, assisting individuals and corporates in applying international, EU and local tax law to their business activities, including through the use of legal relationships such as trusts, foundations, partnerships and joint ventures as is suitable to the case at hand. Since the inception of Malta as a hub for genuine blockchain business, she has been focusing on the fiscal intricacies of DLT assets and transactions. She has attended and given lectures and presentations in connection with local and international tax law, both locally and abroad. Trudy lectures part of the course leading to the Advanced Diploma in International Taxation (ADIT) and the MIT Course on Taxation and is frequently invited to give lectures by the Malta Institute of Management, the Malta Institute of Taxation, the Malta Institute of Accountants as well as other academic organisations. She also sits on the Education Committee of the Malta Institute of Taxation. Trudy was the first administrator, and a board member, of the Malta Association of Family Enterprises, playing a key role in formulating local fiscal proposals to facilitate the inheritance of Maltese family businesses. During this time, she represented the Association in official working groups and meetings and gave presentations and speeches on the Association’s role and proposals.