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When the FATF comes calling: Gibraltar has updated its DLT framework
When the FATF comes calling: Gibraltar has updated its DLT framework
Regulation

When the FATF comes calling: Gibraltar has updated its DLT framework

By Giorgi Mikhelidze - 26 Sep 2020

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The Gibraltar Financial services commission (GFSC) has modified its regulations in the operation of distributed ledger technology (DLT) in order to combine the latest Financial Action Task Force jurisdictions. 

The GFSC stated this to answer the blockchain’s fast-moving nature. Agencies are trying to protect their customers while supporting the companies. These new rules include travel rules. 

They are thinking about virtual assets. They also need to make better reports of transactions. Companies will need to update the information for both investors and customers on risks around the virtual assets

According to GFSC, they have reached 13 firms and all of them are already licensed. Gibraltar is the leader in the crypto industry with its regulations around crypto. 

About Gibraltar and DLT

Gibraltar is the regulator of financial services in the global market. They are very responsible and keen on their job. Gibraltar is the promotion of good businesses and is trying to protect customers and investors from the companies which are not very clear in their field. They started to regulate in 2014. 

It currently requires companies to register in order to be part of this operation. The company needs to satisfy certain requirements and they also need a good reputation among the customers. 

New guidance 

Recently, on September 17th Gibraltar updated its regulatory framework. In the past, they were criticized that they did not do enough in order to protect their partner companies, so now they are trying to have a natural evolution of the defined regulatory principles. 

Virtual risks have become more and more frequent, because of that, additional factors are needed. 

Why Gibraltar?

It’s not a surprise that Gibraltar is a hawk’s eye for scam markets. After 6 years of existence, they have introduced a regulatory regime for blockchain firms and since then the trading industry has attracted a number of industry-leading firms. 

Their fame is beyond good. They are one of the advanced finance hubs which have some pulling-power when bringing promised crypto companies. Gibraltar has strong seeking quality in every field which may include some unfair activities. 

Their aim is to be selective and attract the operators who know how important it is to embrace the commercial and reputational benefits of succeeding under an appraised governing like Gibraltar’s. 

People are also admiring Gibraltar for its strengths to deal with developing tech and payments while using a moderate structure in order to filter out some companies from the market. 

This structure is focusing on rules which allow the development of the companies in their own ways. Sometimes the companies are waiting for the 15 months in order to get a regulation approval they are streaming for. With this approval, they are welcomed openly and the people are respecting and trusting them more. These laws are setting the bars high when it comes to being authorized in the crypto economy. 

This is a helping hand for future companies to feel secure in the world’s market. Also, the timing of Giblartar’s experimentation with the crypto industry is perfect. 

How to obtain the DLT license 

DLT is allowing blockchain companies to be legal in Gibraltar. They are having a crypto license. To have this license one must pay £2,000 in order to fill the application. After that, GFSC will analyze the company and then will see how it connects with the requirements.  It takes some time, but to make the whole process simpler, these steps will be helpful:

  • Evaluating the business strategy
  • Providing the first application 
  • Update the application based on the feedback from the GFSC
  • Resign the final application 

To have the DLT license, one needs to implement a legitimate business pattern that enables connection with customers. After that, they need to consider some of the risks in the market and the goals they need in order to meet with the standards of the safe system. 

Taxation of cryptocurrency projects in Gibraltar

Taxes are depending on income. For Canada, it’s from 25% and ends at 50%. In Japan, it’s 15%-55%. Crypto projects are only paying for 10% of their corporate income. 

Of course, it is possible to start trading without any license in other countries, but it will look suspicious, and its always better to find a trader or a company that offers its customers that extra safeness. Because it is difficult to maintain stability in the financial market.

Giorgi Mikhelidze
Giorgi Mikhelidze

Giorgi is a Georgia software developer with two years of experience trading on the financial markets. He is now working to spread the knowledge about the Blockchain in his country and share all of his findings and research to as many crypto enthusiasts as possible.

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