Gibraltar has positioned itself as one of the first, “crypto friendly” jurisdictions.
In late 2017 Gibraltar released a regulatory framework for blockchain businesses that shored up legal status of the technology as a means of transmitting payments.
Now, in possibly a world first, it has conceived a set of regulations that provide for the registration and regulation of ICOs (Initial Coin Offerings).
This combined with its tax efficient company structures has seen many new start-ups flocking to Gibraltar to host their ICOs & ITOs.
With DLT regulations now in force, and Gibraltar seen as a new hub for crypto related businesses, there is also a small window of opportunity available for these currently unregulated ICO & ITO companies of Gibraltar.
The Gibraltar Regulator is planning a complementary regulatory framework covering the promotion and sale of tokens, aligned with the DLT framework.” The proposed regulations, which are reported to be implemented in the latter stage of 2018 are set to cover any person related to Gibraltar and carrying out activities related to:
- The sale, promotion or distribution of Tokens by persons connected with Gibraltar;
- Secondary Market activities relating to tokens, carried out in or from Gibraltar; and
- Providing, by way of business in or from Gibraltar, advice relating to investment in tokens.
Authorised Persons
One of the key aspects of the token regulations is the regulation of “authorized sponsors” who will be responsible for assuring compliance with disclosure and financial crime rules.
Gibraltar is also reportedly considering regulation relating to investment funds associated with cryptocurrencies and tokens.
This is a wide and general scope, meaning it is likely that the new regulations will cover most if not all aspects of ICO & ITO Gibraltar companies, or individuals.
In effect they have decided that a one-size-fits-all regulatory approach would be inappropriate for the blockchain funding model. Consequently, Gibraltar is instead developing a set of principles for best practice. With these principles, each authorized sponsor will be able to “come up with its own methodology” to apply to the ICOs or tokens that they sponsor.
The new legislation is the logical next step after Gibraltar’s launch in January of a license for companies working with distributed ledger technology (which has made it an appealing destination for blockchain startups).
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