Gibraltar introduces crypto-friendly regulation

The island has passed a bill that provides comprehensive regulation for cryptocurrency and blockchain-based companies.
The British territory of Gibraltar has recently approved a bill that proposes an update to the region's Financial Regulations. The bill, however also addresses several concerns faced by the crypto community. The bill is likely to prove helpful in the island creating a conducive regulatory atmosphere for cryptocurrencies. The comprehensive legislation includes companies involved in the cryptocurrency and blockchain industries, and will be implemented next year.

According to an accompanying memorandum, the bill aims to create an extensive regulatory framework that would protect investors of companies whose activities are not considered licensed traditional investment services.

Several amendments have been made to the bill, including the addition of legally binding terms such as “potential investors”, “customers”, “investors”, and “potential customers”. These changes have been brought about in several sections of Gibraltar’s Financial Services Act. According to legal and crypto experts, these modifications have likely been brought about in order to expand current regulatory policies to include protection methods for qualified investors. The amendments have likely also been designed to protect retail investors who participate in any product offered by the island’s distributed ledger technology (DLT)-based firms.

The bill was approved a month before the country was expected to announce a new regulatory framework to address its growing DLT industry.

According to Gibraltar’s new DLT regulations, known as the “Financial Services (Distributed Ledger Technology Providers) Regulations 2017”, the country will require all DLT companies to apply for a specific DLT license. Successful applicants are required to comply with all regulations as outlined by Gibraltar’s Financial Services Act, as well as the recently added regulatory principles. According to the new bill, the new regulations will be active as of January 1, 2018.

In the last few months, the island has aimed to position itself as an environment that is conducive to the crypto and blockchain industry, while simultaneously protecting all current and potential investors. Earlier this year, Gibraltar confirmed that they intend to create a regulatory framework that will encourage innovation while addressing issues that often arise in the cryptocurrency and ICO industries. In August, the country also installed its very first Bitcoin ATM. This was a progressive and defiant move when most world leaders in the industry have been ambiguous over their crypto regulations.