Gibraltar Announces Plans to Regulate ICOs

Gibraltar Announces Plans to Regulate ICOs

The Government of Gibraltar (HMGoG) and the Gibraltar Financial Services Commission (GFSC) have announced that they are crafting a legislation for tokenized digital assets (tokens), and specifically, the ones that are created and traded using distributed ledger technology (DLT).

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The Government of Gibraltar (HMGoG) and the Gibraltar Financial Services Commission (GFSC) have announced that they are crafting a legislation for tokenized digital assets (tokens), and specifically, the ones that are created and traded using distributed ledger technology (DLT).

As the announcement states, Gibraltar`s Minister for Commerce, Hon.Albert Isola MP made clear that the Government`s position on initial token offerings or initial coin offerings (ICOs) would be formulated this month.

The government took into account feedback from stakeholders and starting drafting the legislation that will eventually regulate:

  • the promotion, sale, and distribution of tokens by persons connected with Gibraltar;
  • secondary market activities relating to tokens carried out in or from Gibraltar; and
  • the provision, by way of business, in or from Gibraltar of investment advice relating to tokens.

The Parliament may consider a bill in the second quarter of 2018, as their statement explains.

Other aspects of regulation that are being reviewed are investment funds that feature digital assets like cryptocurrencies and similar DLT-based tokens.

Gibraltar`s DLT regulation came into effect on January 1, 2018. It brought a licensing regime to intermediaries using DLT to store or transmit customer assets but did not extend to the use of tokens as a way of raising finance, which is typical for early-stage start-ups, as Gibraltar`s Ministry of E-Commerce wrote in their statement.

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