On 26 October 2015 the Isle of Man launched initial legislation to regulate Crypto Currency, one of the first jurisdictions in the world to do so.
The priority is to ensure that firms operating in this sector are compliant with Anti-Money Laundering and Countering the Financing of Terrorism Regulations (AML and CFT).
The Isle of Man regulatory authorities are registering businesses in the industry under the Designated Businesses (Registration and Oversight) Act 2105 ("Designated Businesses Act") and will start to oversee their compliance in relation to AML and CFT legislation.
Crypto Currency is very much an evolving sector and to fully regulate it with detailed legislation at this stage would be ill considered as the sector is changing so rapidly. Appropriate regulation requires a regulator that is quick to evolve and at the same time operates with caution and care; the Isle of Man provides such a solution.
If this sector is to be successful and attract private equity investment, entrepreneurs need to act responsibly, and this regulation will assist the serious players to formalise banking arrangements by submitting to AML and CFT supervision. This is an excellent first step towards fully commercialising crypto business within the financial services industry in the Isle of Man.
Businesses involved in the following activities are covered under the recently announced legislation: "issuing, transmitting, transferring, providing safe custody or storage of, administering, managing, lending, buying, selling, exchanging or otherwise trading or intermediating convertible virtual currencies, including crypto-currencies or similar concepts where the concept is accepted by persons as a means of payment for goods or services, a unit of account, a store of value or a commodity".
The regulation is embedded in the Designated Businesses Act, which came into force on 26 October 2015. The Act does not make persons affected by its provisions licence-holders, the Authority's role in licensing and supervising Financial Institutions is distinct and entirely separate from its role under this Act.
Dixcart Management (IOM) Limited is licensed by the Isle of Man Financial Services Authority
Originally published on 01 December 2015
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