The Gibraltar Financial Services Commission (GFSC) has published the updated Distributed Ledger Technology (DLT) provider Guidance Notes to help and protect users and further assist organizations. Much in alignment with the Financial services act of 2019, and formulating ways to adhere to best practices, the updated decree notes provide additional information to firms. The mandate expands existing expectations off DLT providers. It replaces the initial guidance notes that were published back in December 2017.
The GFSC will include the latest rules of the Financial Action Task Force (FATF). The reason for including more provisions from FATF has been the rapidity with which blockchain is moving ahead. The updated version of the guidance includes the most current FATF recommendations about Virtual assets service providers (VASP). It also aims to update recommendations around these service providers to collect as well as transfer important customer details in transactions. In its recommendation, GFSC says that virtual assets should be considered as ‘property,’ ‘proceeds,’ ‘funds,’ ‘funds or other assets,’ or other ‘corresponding value’.
The new guidelines require the VASP’s to upkeep error-free, robust, and most updated records of transactions. It also has said that companies should look at updating new customers on what the risks would be in investing in virtual assets and also upgrade its factors on onboarding.
Gibraltar Minister for Digital and Financial Services Albert Isola said that such regulations will ensure that the region inches closer to the ever-growing global regulations and will keep up with it.
“The release of the updated Guidance Notes is another important step forward in the development of the DLT Providers Regulatory framework that has proved so successful to date. It is also a significant milestone in the evolution of our regulations as we embark on the road to achieving ongoing FATF compliance. My thanks go to all parties involved in the delivery of these updates.”
The changes related to the mandates is a thought process that has been running since last November. The discussion took place between GFSC, Gibraltar Association for New Technology, and lastly the DLT provider official licensees. GFSC mentioned that there were 13 DLT firms in the territory including eToro, Huobi, Xapo, LMAX, Bitso, and Gnosis.
During this period, the GFSC gained a great deal of experience by interacting and supervising closely with permissioned firms. It gained insights from discussions about regulatory approaches through the GFIN membership.
Head of DLT & Markets, William Gracia, said:
“My team and HM Government of Gibraltar have worked hard over the last few months hand in hand with industry, encouraging feedback where appropriate and we believe we have achieved a clear and helpful update benefitting both DLT providers and consumers. I’d like to thank the Gibraltar Association of New Technologies (GANT) for their support, as well as those DLT Providers and applicants who provided valuable feedback. I believe this is another step forward for Gibraltar’s innovative financial services sector.”
Gibraltar has always been regarded as a true leader in the crypto industry as it has always voiced its opinion and has been extremely open about regulatory advances. It is even known as the next crypto hotspot.