The Gibraltar Financial Services Commission (GFSC) is drafting regulatory requirements for the initial coin offerings (ICOs) with dedicated rules for the cryptocurrency sector, to become the first watchdog to do so, reports Reuters.
The regulation will establish disclosure rules that require accurate and adequate information on the ICOs in order to avoid misleading and confusing investors, which is sometimes the case with the unregulated ICOs.
“One of the key aspects of the token regulations is that we will be introducing the concept of regulating authorized sponsors who will be responsible for assuring compliance with disclosure and financial crime rules,” said Sian Jones, a senior adviser to the GFSC, quoted by Reuters.
Gibraltar is also reviewing its rules for investment funds that involve cryptocurrencies and tokens.
In the beginning of 2018 Gibraltar, which is more famous for being the home of numerous online gambling companies benefiting from its favorable taxes, introduced a license for fintech companies involved in distributed ledger technologies (blockchain) in order to diversify its financial sector.
This means that firms in Gibraltar, that use DLT to store or transmit value belonging to others, now have to apply for a licence from the GFSC. The purpose is to protect consumers and Gibraltar’s reputation.
So far only Japan has enacted a set of legal requirements for cryptocurrencies, but they apply to the cryptocurrency exchanges and money transmitters. On a regional level, there are requirements in the State of New York and some Canadian provinces, but no regulator has set rules for ICOs.