Gibraltar Government Drafting Virtual Currency Bill
by Jason Gorringe, Lowtax.net, London
14 February, 2018
Gibraltar's Government and its financial services regulator, the Gibraltar Financial Services Commission, have announced they are working together to draft legislation to regulate virtual currencies, including tokens and coins.
The proposed legislation will regulate the promotion, sale, and distribution of virtual tokens and coins created and traded using distributed ledger technology (blockchain) by persons connected with Gibraltar. It will also regulate secondary market activities and the provision of investment advice relating to tokens in or from Gibraltar.
The proposed legislation will establish disclosure rules, requiring adequate, accurate, and balanced disclosure of information to anyone considering purchasing tokens, as well as measures to detect and prevent financial crime, such as money laundering and terrorist financing.
The announcement of the new legislation to regulate digital tokens and coins adds to Gibraltar's existing licensing regime, which took effect from January 1 this year, that requires the registration of all intermediaries using distributed ledger technology to store or transmit customer assets.
Sian Jones, senior advisor on distributed ledger technology at the Commission, said: "Token regulation is the natural progression following the regulation of distributed ledger technology 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 authorized sponsors who will be responsible for assuring compliance with disclosure and financial crime rules."
Legislation to regulate virtual currencies, including tokens and coins, is expected to be considered by Gibraltar's Parliament in the second quarter of 2018.
Gibraltar's Government has also announced it is considering the regulation of investment funds holding digital assets such as cryptocurrencies and similar distributed ledger-based tokens.
See all of today's news