Isle Of Man To Regulate Cryptocurrencies
by Mike Godfrey, Lowtax.net, Washington
13 June, 2014
The Isle of Man's Department of Economic Development has announced that the island intends to introduce measures to enhance controls on the use of digital currencies, such as Bitcoin.
Cryptocurrencies fall outside of the Isle of Man's traditional anti-money laundering legislation. The Department said the absence of regulation "leaves a window where businesses could trade from the Isle of Man [and] undertake practices which are at odds with the island's stance on anti-money laundering and crime."
The island said it is to recognize digital currency as property, rather than currency, and impose the appropriate anti-money laundering controls that apply to other designated businesses. The measures will be introduced in two stages: firstly by including digital and cryptocurrencies within the remit of the Proceeds of Crime Act 2008; and, secondly through the proposed enactment of the Designated Business (Registration and Oversight) Bill 2014.
Businesses trading in digital currencies will not need to be licensed by the island's Financial Supervision Commission, but will need to register with it, and will be subject to compliance reviews.
The Department's Director of E-Business Development, Peter Greenhill, said: "The Isle of Man recognizes both the risks and opportunities presented by digital and virtual currencies. We are conscious of issues that have surrounded these activities, but also can identify serious and credible entrants to the market wishing to explore this innovative technology. Therefore, the Government has instructed the relevant departments and statutory bodies to ensure there is a regime that promotes business opportunities but also applies appropriate anti-money laundering requirements."
"Our stance is intended to welcome those who can meet the necessary standards while also preserving the island's good reputation as a financial center. We will work with Isle of Man Financial Supervision Commission, Department of Home Affairs, and industry to ensure a fair and appropriate regime is implemented. This is not at this stage expected to embrace a full prudential suite of requirements, so consumers will need to be aware of this when making their decisions."
"While it will take a period of time to instigate, it is a clear demonstration of the Isle of Man's commitment to keep abreast with market developments but also maintain its international responsibilities. We anticipate that this market will develop and change rapidly and, as a result, we will keep market changes under review and with a view to considering future regulatory regimes as required. Of course, if any business were to undertake activities that are regulated under existing regulations, we will expect them to comply fully."
The Minister for Economic Development, John Shimmin, said: "I welcome this move to create a framework for the regulation of digital currencies. The Isle of Man is synonymous not only with innovation, but for a regulatory environment that is both effective and pragmatic."
"With this announcement the Isle of Man reinforces its status as a jurisdiction that welcomes well-controlled and compliant businesses while sending a clear message to those who would seek to operate outside the law that we are open for good business only."
"We will work with the business community in the coming months to ensure that a proportionate and appropriate regime is implemented that meets international standards. We anticipate other jurisdictions will follow the Isle of Man's lead."
See all of today's news