The financial regulator of the Isle of Man recently introduced changes to its policy governing the registration of companies in the cryptocurrency industry. The British Crown dependency in the Irish Sea is also tightening rules applicable to projects that conduct initial coin offerings (ICOs).
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Financial Authority Adopts Stricter Requirements
Cryptocurrency companies filing for registration under the the self-governing territory’s Designated Businesses Act 2015 will be required to meet two new criteria. The updated policy states that companies must have at least two directors who are residents of the island. In addition, registered entities must be managed and controlled from the Isle of Man.
The new rules are designed to improve the oversight of businesses involved in cryptocurrency-related activities, Mondaq reported. The Isle of Man Financial Services Authority (Iomfsa) believes that companies that are managed outside its jurisdiction or those that do not maintain a sufficient presence in the territory pose an “unacceptably high risk” of illegal activities such as money laundering or terrorist financing.
“In order for the Iomfsa to be able to successfully undertake its statutory duty of overseeing compliance of designated businesses with the AML/CFT legislation, designated businesses must have sufficient real presence to facilitate oversight,” the regulator further explained.
The updated registration policy, which has been enforced since early October, also concerns the issuers of digital tokens. Iomfsa has made it clear that it would refuse to register businesses conducting ICOs unless they provide investors with a benefit other than the token itself. However, the regulator has not clearly defined the term “benefit,” nor has it clarified when the buyers of a token should receive it.