Offshore regulation of Crypto currencies


The crypto currency phenomena, and some initial initiatives as to regulating it, can be found also in offshore jurisdictions. Much alike major jurisdictions, there are various models or approaches.

While some jurisdictions settled for the issuance of notices and circulars to their licensees and to the public, stating that bitcoin is not a currency while warning about the risks associated with crypto currency activities, the greatest concern being the anonymity of the parties behind the transactions and the volatility of trading crypto currencies, other jurisdictions have chosen to embrace the challenge of regulating crypto currencies activities, even if by applying light regulations.

Gibraltar – the Gibraltar Financial Services Commission plans to introduce regulations to oversee blockchain businesses operating in Gibraltar, which will come into effect in January 2018. These regulations will cover subjects such as conduct of business, proper maintenance of clients’ funds, fair treatment of clients, financial resources, risk management and corporate governance.

Island of Jersey – providers of crypto currency services are required to register with the Jersey Financial Services Commission (JFSC) if their annual turnover crosses the threshold of 150,000 pounds. Some reporting duties apply as well. Failing to register within three months of crossing the above mentioned threshold is punishable.

Belize – the offering of crypto currencies is allowed under the Money Exchange Services license. Obtaining this license requires only 1 director, no local physical presence and a $75,000 USD paid up share capital requirement. A crypto currencies exchange named already provides services under that very license.

Some jurisdictions have taken a bolder approach, leading them to the adoption of innovative initiatives.

Such an example is Mauritius, where Consensys, a startup operating in the ethereum sphere, has reached out to local authorities seeking to establish a blockchain hub in Mauritius, where blockchain actors will benefit from the local lighter regulations. Consensys also intends to invest in the local work force by establishing a blockchain academy which will train local employees.

The regulatory landscape is constantly changing and we expect to see further developments and regulatory possibilities. We will certainly keep updating on the matter.

Porat Group is one of the first law firms to offer legal services that enables crypto currency business owners to regulate their businesses and activities. Our lawyers are well equipped to handle regulation processes for the industry in various jurisdictions and make sure to be up to date with any news in the industry. To prove our commitment to the crypto currency eco system, we are one of very few law firms accepting payments in crypto currencies in return for the provision of our services.