New Initial Coin Offering rules will look to find compromise between protecting consumers and promoting innovation.
As regulators across the globe are plotting strategies for bringing elements of cryptocurrency technology under the umbrella of their rules, reports state that Gibraltar has advanced plans to introduce the world’s first regulations for Initial coin offerings. It follows a trend among central banks around the world to point out that, as cryptocurrency becomes a far more mainstream proposition, consumers are in need of the same kind of protections that are enforced on the providers of other similar financial instruments.
While the response to the rise of ICOs across the world has so-far varied from outright bans to attempting to deal with them using existing regulations, Gibraltar’s Financial Services Commission is discussing drafting a bespoke law to regulate the promotion, sale, and distribution of ICO tokens connected with the British overseas territory – the first such ICO-specific rules in the world.
“One of the key aspects of the token regulations is that we will be introducing the concept of regulating authorised sponsors,” said Sian Jones, a senior adviser to the GFSC, who added that these sponsors “will be responsible for assuring compliance with disclosure and financial crime rules.”
According to Reuters, these bespoke rules will also establish disclosure rules that require coin creators to offer adequate, accurate and balanced information to anyone buying tokens.
It’s a pretty sure bet that Gibraltar – which is looking to protect its financial services industries in preparation for Britain’s exit of the European Union – and its new policy will be closely watched around the world. Not least by Britain and the other members of the EU – following the finance ministers of France and Germany recent request that cryptocurrency rules be on the agenda of the next G20 meeting.
Picture: James Cridland