The Isle of Man Financial Services Authority (IOMFSA) has published its stance on the regulation of crypto tokens and assets.
The guidance, developed in partnership with Digital Isle of Man, sets out to offer blockchain-based businesses greater clarity when looking to set up on the island.
The Isle of Man has become an increasingly popular choice for companies making use of Digital Ledger Technology (DLT), thanks largely to regulators’ forward-thinking approach and flexibility.
One key takeaway from the announcement is that crypto tokens will not necessarily be regarded as securities.
The guidance read: “The IOMFSA looks to substance rather than form: it will regulate entities undertaking activity with crypto assets and tokens that have the characteristics of securities or electronic money to the same extent as if they were issued in other forms.”
It also said that companies’ activities that fall outside the IOMFSA remit, would not require a financial services licence, but would need to register as a Designated Business on the island, as well as to comply with Anti-Money Laundering and Countering the Financing of Terrorism requirements.
The IOMFSA also published a list of frequently asked questions relating to crypto asset and crypto token regulation, available here.
‘An important milestone’
Digital Isle of Man Regulatory Lead Steve Billinghurst said: “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.”
The team at Affinity Group has experience and expertise in helping blockchain businesses set up home in the Isle of Man. Talk to us about how we can help.