Blog
Virtual currency draft bill in Gibraltar
Feb 28, 2018
Distributed ledger technology (DLT), widely known as the blockchain, is a stumbling block for many jurisdictions. It is hard to ignore it now due to the fact that dozens of businesses in their activities use virtual technologies and, as a result, virtual currencies. Gibraltar is the jurisdiction that, along with the others, starts adding DLT to its scope of regulation.
The Gibraltar Financial Services Commission is the main governmental body that deals with the financial services regulation. Virtual currencies, including tokens and coins, are going to be the subject of regulation after the adoption of abovementioned legislation. It is expected to be considered by the Parliament and to come into force in the second half of 2018.
How will Gibraltar treat virtual currencies? First, sale, distribution and promotion of any kinds of tokens and coins which use blockchain technology will be subjected to the regulation. Consequently, new acts will contain rules about investments, secondary market activities and probably investment funds holding digital assets.
Narrowing this information, legal regulation will consist of:
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- -Information disclosure about purchasing tokens;
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- -Measures of preventing money-laundering and financing of terrorism;
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- -Regulations for authorized sponsors who will bear the responsibility to assure compliance of token distribution with existing rules;
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- -Rules for companies and individuals who provide advice regarding token business.
Full text of future legislation is not yet available but Offshorelicense Ltd specialists know all up-to-date information about existing token and DLT regulations in Gibraltar and follow the updates from the Gibraltar Financial Services Commission. Representatives of the Commission state that regulating tokens is a crucial step in protecting users of digital assets.
Consequently, we feel the need to remind our clients about existing licensing regime for intermediaries who use blockchain technology in their business. Since January 1st, 2018, companies storing or transmitting customer assets using DLT are to be registered officially.