Trent Challis, who is an independent advisor on cryptocurrency had this to say on the new regulations: “I am delighted that Gibraltar has taken it upon themselves to show the world what necessary steps should be taken towards adopting Distributed Ledger Technology in a safe and meaningful way.
GIBRALTER (PRWEB) October 15, 2017
With the demand for cryptocurrencies heating up worldwide, Gibraltar has made a groundbreaking step towards the future of our global financial markets. Ahead of all other countries, Gibraltar is the first to lay out a complete set of regulations for all forms of Distributed Ledger Technology (DLT). These laws will come into effect from the 1st January 2018.
The news may come as a surprise to many who have been closely following the developments in other, larger nations, which are more dominant in the cryptocurrencies markets. However, by working closely with Ellul & Co Law Firm, Gibraltar will be setting the standard for other countries which need to take note and speed up their actions.
Having only recently been announced, it is as of yet unclear as to how this move will shake up the DLT industry, but no doubts investors will see Gibraltar as a tantalising place to move some of their operations. DLT markets offer numerous benefits and exciting investment opportunities, but without regulation in place, criminal activity still plays an unwanted role.
To see examples of the dangers of unregulated crypto markets, one needs to look no further than BTC-e which, in the six years it was active, was responsible for laundering more than $4 billion in cash. 38 year old Alexander Vinnik is still under custody regarding his actions, which have brought about a great deal of unwanted bad press surrounding DLT. Vinnik is certainly not the first to use Blockchain technology for illegal means and, without suitable global regulations, he will almost undoubtedly not be the last to do so.
These new regulations will affect all areas of Blockchain, and, as such, all individuals and companies who utilise DLT to store and transfer values which belong to others. Blockchain technology is the very system upon which cryptocurrencies are based, and by regulating all individuals and companies using them, it sets the path for a far safer financial system for all parties. The Gibraltar Government, alongside the Gibraltar Financial Services Commission, has laid out nine principles that must be adhered to by all DLT firms.
Amongst other things, these nine principles outline a need to protect customer assets, ensure the highest possible security protocol at all times, have suitable solvency plans in place to protect investors and customers, ensure proper protocol to protect against money laundering and other criminal activities.
The Gibraltar authorities are well aware of the rapid change and expansion of DLT firms and so will review them all on a case-by-case basis. What this means is that, if they deem it necessary that certain businesses carry unique risks or threats, then the regulations placed upon them can be different to other firms.
It should be noted that not only do these new regulations help benefit consumers, but they also play a crucial role in helping businesses prosper and flourish. Clear rules and guidelines remove any unwanted “grey areas” of legal activity and allow them to operate in confidence that they are obeying the law. It also allows them to compete with one another within the confines of the law and avoid being outmanoeuvred by firms operating illegal practices.
Beyond setting up teams responsible for monitoring DLT firms, local authorities have also established an “Innovate and Create Team”. This team is there to discuss new financial business ideas and offer feedback and support in setting up in Gibraltar. This move is another great way to secure budding business growth at an early stage ahead of competing nations.
Trent Challis, who has is an independent advisor on cryptocurrency had this to say on the new regulations:
“I am delighted that Gibraltar has taken it upon themselves to show the world what necessary steps should be taken towards adopting Distributed Ledger Technology in a safe and meaningful way. By taking these pioneering first steps, it is our hope that other nations follow suit and innovate in much the same way.”
Cryptocurrencies offer an exciting new future for the way in which the world carries out transactions, and you only need to look at the soaring value of Bitcoin to see the incredibly high demand that currently exists. However, countries like South Korea, Russia and China seem to be taking steps to further restrict their use, rather than incorporate them and accepting change. Experts who understand these markets have warned that such measures will do little to reduce illegal activity, but instead increase it, as firms have little legal guidelines in which to operate.
It is likely that, following this very recent announcement, nations like those listed above may be quick to review their plans. For now, however, Gibraltar offers the most exciting opportunity for new financially-savvy enterprises and it is likely that the “Innovate and Create Team” will have their work cut out for them in the months to come.
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