Gibraltar is reportedly planning to introduce first regulations for initial coin offerings in the world. The government of Gibraltar and Gibraltar Financial Services Commission (GFSC) announced a few days ago that in the coming weeks they will be drafting a law regulating Initial Coin Offerings (ICOs) in the British overseas territory.
The aim of the draft law is to regulate the promotion, sale as well as the distribution of digital tokens on Gibraltar’s territory. And if such law is at all drafted it will be the first of its kind ever to set regulations that are developed specifically for ICOs, according to lawmakers. GFSC’s senior advisors, Sian Jones said that the principal aspects of the ICO regulations by Gibraltar are to introduce the concept of “authorized sponsors” supposed to be “responsible for assuring compliance” with disclosure and financial crime rules.
Draft Law To Establish Disclosure Rules
The government and Financial Services Commission stated that the draft law will also establish disclosure rules that will make it mandatory for the ICO projects to come up with adequate, accurate, and balanced information to anyone who wants to buy tokens. As per the report, more than $3.7 billion was secured in ICO fundraiser at the global level in 2017 as compared to #100 million in 2016.
It indicates that the ICO market is expanding rapidly which is why the Gibraltarian regulators have decided to take action. In September 2017, a press report said that the fast increasing ICOs numbers have provoked GFSC to come out with an official statement to warn investors of the “highly risky and speculative” nature of fundraising campaigns of ICO.
In the recent weeks, central bankers have come together to demand regulation of ICOs and cryptocurrencies and to point out that even though innovation in finance is beneficial, consumers must be protected. In a letter, the finance ministers and central bank governors of France and Germany stated that token could post substantial risks for investors and can be vulnerable to financial crime without appropriate measures.