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Gibraltar Updates Distributed Ledger Framework to Align With FATF Crypto Regulations

09/19/2020
Gibraltar Updates Distributed Ledger Framework to Align With FATF Crypto Regulations

The Gibraltar Financial Services Commission (GFSC) has updated its guidance notes for distributed ledger technology (DLT) providers to include recommendations for risk management, as well as clarify aspects around the issuance of digital assets.

In a statement released on September 17, the regulator said the new updates are part of an ongoing effort to adapt its regulatory framework to include the latest Financial Action Task Force (FATF) recommendations for virtual asset service providers.

Gibraltar, which has been criticized by the European Union for not doing enough to curb money laundering in the past, particularly in its DLT rules, describes the update as a “natural evolution of the defined regulatory principles.”

According to the GRSC, the guidance notes update the risk framework to “distinguish between virtual assets and virtual asset denominated instruments that are generally classified as higher risk and require additional factors or onboarding tests to be considered.”

Amendments to new token issuances prevent DLT providers from utilizing internally generated token reserves as part of its regulatory capital requirements. In total, the regulator has updated seven out of the nine guiding principles supporting the existing framework, launched in 2018.

Gibraltar’s Minister for Digital and Financial Services, Albert Isola, commented:

Prospective licensees must demonstrate a clear appreciation of the nine core principles underpinning the regulatory framework, covering areas such as corporate governance, capital adequacy, risk management, customer care, and in due course, market manipulation. Other essential prerequisites include thorough internal risk management strategies, robust corporate governance structures, and well-defined protocols, with secure checks in place to ensure the protection of clients’ assets is prioritised.

Currently, 13 DLT providers are licensed under the Gibraltar Financial Services Commission, including international platforms Etoro, Huobi, Xapo, and Bitso.

What do you think about Gibraltar’s updated DLT framework? Let us know in the comments section below.

The post Gibraltar Updates Distributed Ledger Framework to Align With FATF Crypto Regulations appeared first on Bitcoin News.