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British Territory Gibraltar Prepares to Regulate Cryptocurrency and DLT Companies

Dec 16, 2017 Posted /  3456 Views

British Territory Gibraltar Prepares  to Regulate Cryptocurrency and DLT Companies

Amending the Financial Services Act of 1989

Lawmakers in the British Island Territory of Gibraltar have passed a new bill allowing the amendment of the Financial Services Act of 1989. The passing of this bill is expected to pave a path for developing a comprehensive regulation that will govern cryptocurrency and Distributed Ledger services in the Territory.

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According to a government memorandum, the intention of the bill is to extend the measures for the protection of investors to clients of licensed operators dealing in activities being controlled by the state which does not necessarily provide investment services.

In the update additional terms like Customers and Potential Customers, Investors and Potential Investors were added to the old Bill Comprising Gibraltar’s Financial Services Act originally developed in 1989.

Cryptocurrency experts have deduced that the new amendments to the Bill are intended to extend the current regulations meant to safeguard qualified investors to include the activities of retail investors. It is further perceived that this new regulation is defined how cryptocurrency and Blockchain services can legally operate in the region.  A second Bill aiming to regulated Initial Coin Offerings (ICOs) is expected to be upcoming.

Senior Government Advisor on Distributed Ledger Technologies (DLT), spoke to a reporter from Reuters saying that the new regulations will enable businesses to own bank accounts and establish their legitimacy with potential customers.

The Bill Came at a Time when Gibraltar Prepares to Regulate Cryptocurrency

According to the New DLT Regulations dubbed, the Financial Services (Distributed Ledger Technology Providers) regulation 2017, licenses will be issued to firms after before could start operating in the region. All Distributed Ledger Technology providers are required by the new regulation to adhere to the regulatory requirements of the governing the territory’s Financial Services Sector. According to Government officials, the new regulations will come to effect January 2018.

Generally, Gibraltar has been working towards positioning itself to become a hub for the development and cryptocurrency and Blockchain services by trying to attract as many foreign companies into the island as possible. To complement this, Gibraltar has installed its first Bitcoin ATM at the reception area of the World Trade Center on the Island. The country went against the world trends by recommending a regulation for ICOs in September this year.

The new regulatory framework which requires startup firms to hold some capital before registering with the regulatory body. The exact amount of capital is to be determined based on individual cases of the startup. A requirement to ensure that Anti Money Laundering and Terrorist financing regulations are also included in the Bill. A consultation was made with several law firms and advisors to help companies establish their operations in the territory.

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Tags: cryptocurrency distributed ledger Distributed Ledger Technologies

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