Gibraltar

Gibraltar as a crypto-friendly jurisdiction

By Philip Cartwright, Abacus Financial Services Ltd

Gibraltar has been at the forefront of regulating crypto and blockchain space. The government, regulator, and local law firms combined into a working practice group and introduced their own regulations on 01 January 2018 for Distributed Ledger Technology (DLT).

The DLT framework sets out nine core principles for the Gibraltar Financial Services Commission (GFSC) to grant the provider a licence:

  1. A DLT provider must conduct its business with honesty and integrity.
  2. A DLT provider must pay due regard to the interests and needs of each and all of its customers and must communicate with its customers in a way that is fair, clear and not misleading.
  3. A DLT provider must maintain adequate financial and nonfinancial resources.
  4. A DLT provider must manage and control its business effectively, and conduct its business with due skill, care and diligence including having proper regard for risks to its business and customers.
  5. A DLT provider must have effective arrangements in place for the protection of client assets and money when it is responsible for them.
  6. A DLT provider must have effective corporate governance arrangements.
  7. A DLT provider must ensure that all systems and security access protocols are maintained to appropriate high standards.
  8. A DLT provider must have systems in place to prevent, detect and disclose financial crime risks such as money laundering and terrorist financing.
  9. A DLT provider must be resilient and must develop contingency plans for the orderly and solvent wind-down of its business.

Gibraltar’s development in this sector saw the initial interest of the ICO market, to more mature businesses involving crypto funds, exchanges and wallet providers.

High profile providers such as Xapo and Huobi have set up business and are licensed in Gibraltar, with rumours of Binance following shortly.

Gibraltar’s funds market has seen a huge increase in business because of crypto funds. Whilst investors have built algorithms to trade crypto in such a way that, despite a volatile market, Gibraltar has the infrastructure and expertise in place to guide clients through the process of setting up a private fund or an experienced investor fund.

Experts to enable a smooth process include lawyers, auditors, fund directors, banks and fund administrators.

What’s next in Gibraltar, only time will tell.


Philip Cartwright

Philip Cartwright

GGI member firm
Abacus Financial Services Ltd
Auditing & Accounting, Fiduciary & Estate Planning, Tax
Gibraltar
T: +350 200 78777
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W: abacus.gi


Published: GGI Insider, No. 119, May 2022 l Photo: malajscy - stock.adobe.com

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