Gibraltar to Formulate The World’s First Dedicated Rules for Initial Coin Offerings
The British Overseas Territory, Gibraltar, has been officially granted to decide the framework of regulatory procedures for ICOs. As recently reported by Reuters, the Gibraltar Financial Services Commission (GFSC) and the Gibraltar government has recently announced that in the coming weeks, they will be developing a draft law in order to regulate Initial Coin Offerings (ICOs).
Nicky Gomez, head of risk and innovation at the GFSC, said: “We are really excited to finally welcome applications from DLT Providers. The team expect to be very busy in the coming months, and are looking forward to working on some interesting and innovative ideas with applicants.”
The lawmakers claim, that the will be the first-of-its-kind regulations that are developed specifically for ICOs and will aim at regulating the sale, promotion and distribution of virtual digital currencies. Said Jones, a senior adviser to GFSC said: “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.”
The regulations will certainly involve a specific set of rules that will provide investors with accurate and balanced information for purchasing new digital tokens, said the government and GFSC in a joint statement.
Albert Isola, Gibraltar’s commerce minister said: “We remain fully committed to ensuring that we protect consumers and the reputation of our jurisdiction.”
As reported by Reuters, regulators from around the globe as closely watching the decisions coming from Gibraltar and some countries like the Britain and Singapore might formulate similar rules in the coming weeks ahead.
In the past few weeks, central banks and other global financial institutions have been pressing hard on the need of building a regulatory framework, and have sought support from many countries to arrive at a common platform. Many have said that although new innovations can certainly bring a lot many benefits over the existing financial system, it must be seen that investors at the same time remain protected.
In a latest Senate hearing last week, chief of the U.S Securities and Exchange Commission (SEC), Jay Claton, said that new digital tokens should be treated as securities and should be offered in the form of shares to the investors.
The ICO market has a great start in the first half of 2017 as following the crypto craze, investors were seen pouring a huge amount of money to grab new digital tokens early and at a cheap rate. However, the ICO market being completely unregulated, many cases of fraud and cheat started to emerge out later leading the market to a huge slowdown.
As reported by Ernst and Young, around $400 million of investors’ funds were lost or stolen in ICOs alone. It will be interesting to see whether the new rules and regulations can really restore the lost glory of the ICO market while simultaneously protecting investors’ money.