The British Overseas Territory of Gibraltar introduced a new regulatory package for Distributed Ledger Technology (DLT) service providers. The document details the responsibilities of cryptocurrency companies in relation to threats of market manipulation and insider trading.
On April 27, the Government of Gibraltar published the 10th Governing Principle for the regulation of the country’s financial services. Details are revealed in a Guidance Note, provided by the Gibraltar Financial Services Commission (GFSC), the territory’s main financial regulator.
The regulation, prepared by a special working group that included both government officials and industry experts, establishes operational guidelines to prevent market abuse.. DLT providers are expected to monitor the movement of significant holdings of virtual assets, the publication of information that could be intended to generate false or misleading market signals, and to investigate whether algorithm-based systems are being used to generate misleading data. around transaction volumes.
The regulation also requires crypto companies to seek out and prevent any insider trading and to inform the public of any relevant information “as soon as possible.” The proposed trading rules also include the establishment of measures to reduce the ability of liquidity providers and market makers to significantly alter asset prices.
Albert Isola, Gibraltar’s Minister for Digital and Financial Services, expressed confidence that the measures introduced will help the jurisdiction maintain its already strong relationship with the cryptocurrency sector. Isola commented to Cointelegraph:
“The introduction of the 10th principle, with significant input from industry, will further develop our regulatory framework. It provides licensed companies with clear guidance on the standards required of them, as well as providing consumer and jurisdictional protection.”
One of the task force leaders, fintech lawyer Joey Garcia, praised Gibraltar’s push to comply with the FATF recommendations:
“It’s great to see […] Gibraltar to lead in setting standards, particularly as the FATF has cited market integrity and prudential requirements as factors that jurisdictions should consider when developing regulatory requirements for the space.”
Gibraltar, home to a population of about 34,000 people, has emerged as a hot spot for crypto in recent years. Following the GFSC approval, crypto exchange Huobi was reported to have moved its spot trading operations to its Gibraltar-based subsidiary.
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