The government of Gibraltar and the Gibraltar Financial Services Commission (GFSC) are developing legislation relating to tokenised digital assets (tokens) created and traded using ledger technology, or blockchain.
Following the GFSC’s Statement on Initial Coin Offerings in September 2017, Gibraltar’s minister for commerce, Albert Isola, announced that government’s position on initial token offerings (also known as initial coin offerings or ICOs) would be formulated by this month. In December, HMGoG sought the views of local stakeholders through a discussion paper on token regulation circulated to Gibraltar’s Finance Centre Council, an umbrella organisation comprising local professional associations.
A bill is expected to be considered by Parliament in the second quarter of 2018. While Gibraltar’s DLT regulations, which came into effect on 1st January 2018, bring a licensing regime to intermediaries using DLT to store or transmit customer assets, they do not extend to the use of tokens as a means of raising finance, typically for early-stage start-ups.
The proposed token regulations will establish disclosure rules, requiring adequate, accurate and balanced disclosure of information to anyone considering purchasing tokens, and measures to detect and prevent financial crime such as money laundering and terrorist financing.
Isola said, “I am very pleased and encouraged by the volume and quality of applications received by the GFSC. I announced last year that we would introduce complimentary yet distinct legislation covering token sales and have asked the GFSC to complete this work-stream at the earliest opportunity. We remain fully committed to ensuring that we protect consumers and the reputation of our jurisdiction. In addition, we are also conscious of providing safeguards to those firms that have chosen Gibraltar as their home.”
Siân Jones, senior adviser on DLT at the GFSC said, “Token regulation is the natural progression following the regulation of DLT 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 authorised sponsors who will be responsible for assuring compliance with disclosure and financial crime rules.”