13 Feb 2018
Gibraltar has started working on what it says are the world’s first rules for initial coin offerings, following feedback on a consultation on digital assets.
A bill is expected to be considered by Parliament in the second quarter of this year.
The British overseas territory has already introduced a new law requiring firms that use distributed ledger technology (DLT), or blockchain, to apply for licences from the regulator.
In the United Kingdom and elsewhere, ICOs and the trading of cryptocurrencies have come under strong attack from financial regulators and senior figures for their price volatility and associated risks.
A the Gibraltar Financial Services Commission (GFSC) spokesman said Gibraltar is “the first in the world” to come up with rules for an ICO.
“It’s mainly about size. We still share the same principles as the bigger states [in terms of security and risk], however as a smaller jurisdiction we are more flexible [with drafting laws] and firms have greater access to the regulator.”
The government and its regulator GFSC, are working on legislation relating to promoting and selling tokens by people connected with Gibraltar, as well as rules for secondary market activities relating to tokens, a GFSC statement explained.
Legislation is also expected to include the provision of investment advice, in or from Gibraltar relating to tokens.
The development comes after the government sought the views of local stakeholders via Gibraltar’s Finance Centre Council, an umbrella organisation comprising local professional associations.
Siân Jones, senior advisor on DLT at the GFSC said, “Token regulation is the natural progression following the regulation of DLT Providers, being vital to the protection of consumers.
“One of the key aspects of the token regulations is that we will be introducing the concept of regulating authorised sponsors who will be responsible for assuring compliance with disclosure and financial crime rules.”
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