ICO rules first in Gibraltar!

Following the first DLT regulation in January, Blockchain & Cryptocurrency is a hot topic in Gibraltar and there is much to come as the weeks go by. Today we heard of more great news for our jurisdiction from the Gibraltar Government and the GFSC.

“Today HM Government of Gibraltar (GOG) and the Gibraltar Financial Services Commission (GFSC) released a joint press release on the commitment to the world’s first initial coin offering (ICO) rules. The press release follows a statement issued in September last year by the GFSC relating to ICOs and the introduction of the Financial Services (Distributed Ledger Technology Providers) Regulations 2017 (the “DLT Regulations”) on 1 January 2018. The DLT Regulations seek to govern all firms that use DLT to either store or transmit value to others (DLT Firm) – effectively regulating the ongoing business of a DLT Firm. The press release refers to new complimentary legislation which aims to control ICOs.

An ICO involves a company raising funds by offering tokens or coins in return for either crypto currency (such as Bitcoin or Ether) and will seek to legislate on:

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 proposed regulations are likely to focus on “adequate, accurate and balanced disclosure” to prospective purchasers as well as prevention of financial crime.”

Oliver Andlaw, Managing Director of Acquarius Trust Group and Fintech consultant at Cruzlaw says:

“We welcome the commitment of HM Government of Gibraltar and GFSC to the new regulations which we believe are craved by both operators and investors alike. Operators are looking for certainty and credibility brought about by the Regulations and investors require protection and the ability to properly and reliably assess and compare opportunities. Acquarius and Cruzlaw have long been advising our clients that ICOs should in any case be structured, prepared and launched in line with best practices and in particular drawing on our knowledge of other financial promotion regimes and discussions between the industry and the regulator. We are very proud to be operating in a such a forward looking jurisdiction and one which we are confident will attract some of the most exciting and disruptive new businesses of the next few years”

The full press release can be downloaded here

If you need more information on ICO’s or Fintech in general then please contact Cruzlaw LLP or send an email to us for the attention of Nick Cruz.