The Isle of Man recently published guidance on digital assets, token activity, and how they fit into regulatory frameworks in the country. The Isle of Man Financial Services Authority (IOMFSA) says that they take a “neutral approach” when it comes to digital currency and tokens and that they “look to the substance of the activity being undertaken rather than the form.”
According to the IOMFSA, the two biggest takeaways in their guidance paper are that:
1. it will regulate entities undertaking activity with cryptoassets and tokens that have the characteristics of securities or electronic money to the same extent as if they were issued in other forms, and
2. Entities undertaking certain activities with cryptoassets and tokens that fall outside the regulatory perimeter – including cryptocurrencies, such as Bitcoin and Ether – do not require financial services licenses but must register with the IOMFSA as “Designated Businesses” and comply with Anti-Money Laundering and Countering the Financing of Terrorism requirements.
Steve Billinghurst, the Regulatory Lead at Digital Isle of Man commented saying that,
The publication of this guidance is an important milestone, marking the culmination of a period of close cooperation between ourselves and the IOMFSA. But there’s plenty more to do as the regulatory environment in crypto assets and cryptocurrencies continues to develop in major jurisdictions.
Digital Isle of Man continues to keep a close eye on developments and, through a series of discussions with industry stakeholders, we will be bringing new proposals, for its consideration, to the IOMFSA regarding potential future regulatory matters, new guidance notes and further FAQs to support professional advisers and their clients.”
Industry support has been shown from DQ Advocates, MannBenham and Quinn Legal all welcoming this initiative on the Island, adding that the guidance issued demonstrates the IOMFSA’s interest in this burgeoning and fast-paced area of commerce.
Regulatory clarity is a necessity
The Isle of Man is looking to support and catalyze the growth of the blockchain and digital asset industries in their country by providing regulatory clarity as well as giving companies headquartered in the Isle of Man the opportunity to “partner with the Isle of Man Government to access business advisory and accelerate blockchain business growth as well as join an experienced and supportive blockchain ecosystem, with access to a dedicated hub.”
It is just as Congressman Darren Soto said during his presentation at CG Live. “no industry can survive if there’s uncertainty.”
More countries need to follow in the steps of the Isle of Man and at the very least publish guidance so that industry participants with headquarters within their country know where the country stands on blockchain and digital currency offerings and which government agencies they need to register with so that their service offering(s) are compliant.
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