Isle of Man Updates Cryptocurrency Policy

The Isle of Man has applied new rules regarding cryptocurrency companies operating on the island and in other countries that are dependent of the British Crown. The update refers to the Designated Businesses Registration policy, and it imposes new requirements to those who exclusively run their ventures in virtual assets, such as Bitcoin.

The reason for implying these new measures is to “sanitize the local virtual currency scene” as many projects, unfortunately, end up with “zero utility.”

According to the updated document, published by the Isle of Man Financial Services Authority (IOMFSA) on 5 October, crypto companies will no longer be able to register in the Island unless:

• They have a minimum of two board of director members resident on the island’s territory
• Management and control of the business are not domiciled on the island

Ensuring Credible Oversight

Apart from inducing a stricter stance towards virtual currency activities on the island, the IOMFSA is seeking to ensure “credible oversight” of financial scams, since the association has been struggling to properly combat money laundering...  The regulator is hoping to fight these crimes more seriously in the future and believes that the updated policy could prevent potential terrorist financing as well.

To date, the Isle of Man has been criticized on numerous occasions as one of many municipalities that represent a true haven for tax evaders and money frauds. By removing the companies with no real presence in the United Kingdom, the IOMFSA is hoping that the risk of illicit financial transactions will be reduced to a minimum.

In addition, the financial regulatory will “no longer grant licenses to projects that do not offer investors any utility beyond mere ownership of a digital currency token.”

The Official Document Also Reads…

“It is the IOMFSA’s policy to refuse to register an applicant which engages in the CVC business of issuing a CVC (of whatever type) where the CVC issued provides no benefit to the purchaser other than the CVC itself.

Examples of this include, but are not restricted to:

ICOs which convey — limited or no rights to the income generated from a project; limited or no rights to use the assets developed, purchased or acquired from the funds raised by the ICO;

ICOs where there is no reasonable basis for any expected capital growth of the value of the CVC.”

The legitimate decision of IOMFSA is aimed at regulating the entire virtual currency ecosystem. What is your opinion regarding the law changes in the Isle of Man? Post a comment (or more) in the section below!

Source:

“Isle Of Man Tightens Requirements For Cryptocurrency Businesses & Icos”, Osato Avan-Nomayo, bitcoinist.com, November 13, 2018.