GIBRALTAR Law and Practice Contributed by: Aaron Payas, Jeremy Requena, Jerome Compson and Reece Atkinson, Hassans
include crypto-asset exchanges, custodial wallet ser- vices, brokerage and OTC trading desks and crypto funds. There is also growing interest in: • stablecoins and digital asset clearing and settle- ments; • tokenised real-world assets; • smart contract platforms and decentralised appli- cations where central control exists; and • crypto-asset derivatives and asset referenced tokens. Influencing Factors Over The Next 12 Months Several factors are likely to shape blockchain adop- tion in Gibraltar, as set out below. • International regulation: policy and regulatory developments in major markets such as the USA and Europe may indirectly influence practices adopted by firms in Gibraltar. While the industry has undertaken a gap analysis between the DLT Framework and MiCA, concluding that the DLT Framework provides sufficient regulatory coverage, firms operating cross-border may nevertheless face increased complexity. • AML and financial crime: increased oversight and enforcement against high-risk activities such as privacy coins and mixing services may limit certain business models. • As larger, more established firms seek Gibraltar licences, the GFSC’s supervisory expectations continue to evolve. While this naturally favours firms with strong governance, resources, and com- pliance infrastructure, Gibraltar remains a viable option for new businesses that have the right expertise and resources in place to operate within a well-regulated jurisdiction. Integration With Existing Frameworks Blockchain businesses have integrated smoothly with existing legal frameworks, including intellectual prop- erty, largely because Gibraltar applies English com- mon law principles and is agile enough to efficiently adapt its own regulations where required.
There is no bespoke blockchain IP regime in Gibraltar. Instead, existing copyright, database rights, and con- tractual frameworks are applied to blockchain assets, smart contracts, and tokenised content. Gibraltar’s principles-based DLT Regulations, which focus on outcomes rather than rigid rules, have supported this. To date, there have been no reported disputes or legislative conflicts between blockchain businesses and existing IP frameworks in Gibraltar, reflecting the jurisdiction’s pragmatic, principles-based approach to accommodating new technology within established legal structures. 1.1.2 Regulatory Sandbox In the traditional sense, there is no sandbox in Gibral- tar. However, new blockchain-based projects may be able to take advantage of the following. The GFSC applies a four-staged application for authorisation approach (the “Staged Approach”), con- sisting of three mandatory stages and one optional stage: • Stage 1 – Business Model, Capital and Key Indi- viduals; • Stage 2 – Risk Management, IT Systems, Corpo- rate Governance and Financial Crime; • Stage 3 – Conduct of Business, Non-Financial Resources, Policies and Procedures; and • Stage 4 – Mobilisation (Systems Testing – optional). The purpose of this Staged Approach is to provide a structured process for the submission of initial appli- cations to the GFSC. At stage 4, the GFSC may offer DLT applicants the opportunity to obtain permission and operate within a controlled environment, allowing them to test their systems and operations in a safe and protected setting. Participation is at the GFSC’s discretion. On a case- by-case basis, access to the controlled environment may be deemed unnecessary where the GFSC con- siders that the entity can operate effectively on a stan- dalone basis from the point of authorisation. Stage 4 is therefore be applied on a risk-based basis.
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