Introduction to the Gibraltar DLT distributed ledger

In early 2018, Gibraltar implemented the Distributed Ledger Technology Regulatory Framework (DLT Framework).

The key features of DLT regulation in Gibraltar include flexibility, protection of customer interests and Gibraltar's reputation. Financial regulators welcome new entities and industries and promote their growth.

Under DLT license conditions, the following activities are permitted:

Cryptocurrency exchange

Wallet provider

Managed service provider

Dlt-based marketplaces that facilitate the buying and selling of goods and services

Benefits of Gibraltar DLT License:

The tax system is clear and the tax rate is low

Transparent regulation. The legislation implements nine principles that cryptocurrency projects must adhere to. After reviewing your application, the regulator will provide various recommendations.

The regulator's personalized approach to each project. Gibraltar's authorized capital, customs duties and material requirements depend on the specific circumstances of the project.

Gibraltar is considered to be a well-known and attractive jurisdiction for major cryptocurrency industry players

The main purpose of the framework is to promote the economic development of Gibraltar while providing consumer protection and maintaining the reputation and integrity of the jurisdiction.

In view of the above, it is necessary to consider in advance whether the following provisions are acceptable and possible to comply with

Gibraltar DLT distributed ledger Requirements:

The issuance of licences is subject to the circumstances;

The company will submit a detailed white paper;

The company must have an operating platform;

The management process needs to be located in Gibraltar and the nominated directors are involved in the business activities of the company;

The company will need to open a bank account with one of the local banks, which may consider the project inadequate at its discretion;

Face-to-face meetings/presentations with banks and GFSC required;

The applicant must have a strong professional background, experience and sufficient knowledge;

At least 2 employees in Gibraltar. It should be noted that they must have sufficient experience and expertise to operate in Gibraltar

Corporate structure

At least 1 shareholder (maximum 50 shareholders) (no nationality or residency restrictions);

At least 2 directors (at least 1 director with full voting rights must be local);

Add at least one key role employee in Gibraltar. This person can live in Spain as long as it is between Marbella and Tarifa;

Regulatory principles for distributed ledgers in Gibraltar

1.DLT suppliers must conduct their business with honesty and integrity.

DLT providers must fully take into account the interests and needs of all their customers and must communicate with them in a fair, clear and non-misleading manner.

3.DLT suppliers must maintain adequate financial and non-financial resources.

DLT suppliers must effectively manage and control their business and conduct their business with appropriate skill, care and diligence; Including due consideration of the risks to its business and customers.

5. The DLT provider, when in charge of the client's assets and funds, must have effective arrangements to protect the client's assets and funds.

6.DLT providers must have effective corporate governance arrangements in place.

7.DLT providers must ensure that all systems and secure access protocols meet appropriate high standards.

8.DLT providers must have systems in place to prevent, detect and disclose financial crime risks, such as anti-money laundering and Countering the Financing of Terrorism (AML/CFT).

9.DLT suppliers must be resilient and must have contingency plans for an orderly and solvent business.

Initial application evaluation

The GFSC will conduct an initial assessment of the risks and complexities inherent in the applicant's proposed activities and business model. Within 2 weeks of receiving the request for an initial application assessment, the Risk and Innovation team will conduct an initial assessment and classify companies based on the risks and complexity inherent in the applicant's business model and activities.

Full application and presentation Typically, presentations are expected to cover the following areas:

Background of key individuals leading the business, including relevant skills and experience;

Business plan, including company/group structure, products and services, target market, strategy, etc. ;

Financial forecast; and

Demonstrate how the company will meet the 9 regulatory outcomes/principles.

Activity 4:

Please note that Activity 4(ICO/ITO) is not currently covered by DLT legislation, but is likely to be incorporated into GFSC regulations in some form in early 2018.

Therefore, if you have already selected item 4, please forward the following:

A detailed business plan covering all aspects of planned activities for the next two years.

Examples of disclaimers that warn investors of risks.

History/resume of the person in charge,

Source of initial capital.

Website address.

All major ids include:

Passport copy

A copy of the most recent utility bill

Gibraltar's DLT licensing process includes the following steps:

Pre-application participation: Regulators assess project risks and potential to determine project budgets and capital requirements. Next, the project is assigned to one of three complexity levels. Capital requirements, filing fees, and annual state taxes vary by category.

Full application: authorized capital registration, compliance with material requirements, execution of various forms, and implementation of anti-money laundering procedures.

Application consideration and decision: inspection against 9 regulatory principles and investigation to determine that the company will truly operate from Gibraltar.