Isle of Man: A World Leader in Cryptocurrency
Contributed by Atrium Legal Lab
11 August, 2020
Regulatory oversight as a means of Attracting Business
The Isle of Man is showing great enthusiasm for cryptocurrencies, everyone is talking about digital currency and the potentially huge benefits to the Island. The Isle of Man Government has thrown its arms wide open, even suggesting that residents may soon be able to pay their taxes in Bitcoin.
The Isle of Man Financial Supervision Commission (FSC) has been quick to respond to interest in the area, announcing plans to apply anti-money laundering (AML) rules to the industry. The Isle of Man Government appears keen not to suffocate this evolving area with onerous regulation.
Bitcoin has received some bad press and there's still some mystery surrounding digital currency and what it is and why we need it, and a tendency to focus on risks rather than opportunities. Indeed, some operations found out that their treasury services were being withdrawn because of pressures from banks, just as the inaugural Crypto Valley Summit, aiming to showcase the Island as a front-runner in the sector, was opening. It is hoped that registration with the FSC will provide the integrity these start-ups need and, in turn, bring potentially lucrative business to the Manx economy.
Cryptocurrency on the Isle of Man
There are digital currency businesses who want to be regulated. Being accountable to a reputable supervisory body brings credibility, which is something the industry needs just to access the basics, such as a lender willing to provide start-up funds or a trusting landlord to provide office space, as well as to attract customers.
The Isle of Man is already known for innovation and high-quality service in the financial services and e-gaming industries, so this seems to be a logical progression in expanding and diversifying its global business offering. This opportunity also accords with the regulatory objectives of the FSC, which include the reduction of financial crime and supporting the Island's economy and its development as an international financial centre.
The financial regulator of the Isle of Man recently introduced changes to its policy governing the registration of companies in the cryptocurrency industry. The British Crown dependency in the Irish Sea is also tightening rules applicable to projects that conduct initial coin offerings (ICOs).
Isle of Man Cryptocurrency Businesses - Update of Registration Rules
Financial Authority Adopts Stricter Requirements on Substance Requirements
Cryptocurrency companies filing for registration under the self-governing territory's Designated Businesses Act 2015 will be required to meet two new criteria.
The updated policy states that companies must have at least two directors who are residents of the island. In addition, registered entities must be managed and controlled from the Isle of Man. The new rules are designed to improve the oversight of businesses involved in cryptocurrency-related activities.
The Isle of Man Financial Services Authority (IOMFSA) believes that companies that are managed outside its jurisdiction or those that do not maintain a sufficient presence in the territory pose an "unacceptably high risk" of illegal activities such as money laundering or terrorist financing.
For a relevant sector company (other than a pure equity holding company), to have adequate substance it must ensure that local Directors (2) are appointed and that the Management and Control is in the Isle of Man, IOMFSA is placing the emphasise on the local Directors to ensure that the companies fully comply with local legislation.
In this matter of Substance Requirements, you can count on Atrium Legal Lab to help you with all you will be needing through our own local associates.
How long will an application take?
Once received the application will be processed in accordance with the Authority's Licensing Procedure. The Authority's current published service standard for processing an application, from receipt of the application form to a hearing by the Board, is 3 months. This standard applies to an application with which there are no major difficulties concerning the applicant or people connected with the applicant.
An application may take considerably longer than 3 months to process if it is incomplete or if there are issues in relation to the applicant or any of its key persons that require further investigation before a recommendation can be made to the Board of the Authority. To ensure your application is processed as quickly as possible, it is important that you arrange for all the necessary forms and documentation to be completed as accurately as possible and submitted in a timely manner.
During the processing of your application, two-way communication with the Authorizations Division is essential. This dialogue will allow the Authorizations Division to gain a better understanding of the business, which may also speed up the application process.
Why Choose Atrium Legal Lab
- Extensive experience and knowledge of the Seychelles Regulation system
- We are a reliable, well established and stable company
- Moderate prices
- Adept and rapid handling of the application process
Atrium Legal Lab has worked with many clients assisting them in every step of the application process resulting in the acquisition of a Seychelles Forex Security Dealer Licence; this makes us specialists in this field and able to offer brokerages amazing benefits.
Should you have any question or matter you would like to discuss or clarify with us, or should you like to receive further information about our application services and fees, our Business Development Managers will be ready to guide and assist you!
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