Interactive DIGITAL CURRENCIES
one would expect of a responsible jurisdiction. To ignore the problem of such potential criminal activity is to be negligent of the risks.
Are digital currencies associated with crime and money laundering? There have been a number of instances where digital currencies have been used to facilitate money laundering or have been the subject of other criminal activity. The Isle of Man recognises the risks as well as the potential of this recent innovation. As a responsible international part- ner, we want to ensure that crime is kept out of the Isle of Man and that can only be achieved by ensuring the appropriate anti-money laundering protections exist.
Why is the Isle of Man introducing anti-money laundering controls? We are receiving enquiries from all over the world. These are primarily from very credible start-up businesses who want to operate in a con- trolled manner in a well-respected jurisdiction. Other, less well-funded start-ups are looking to find any home for their business. Currently the proposed activities in digital currencies fall out- side of anti-money laundering legislation and other forms of regulation and this poses both risks and opportunities. The absence of regulation leaves a window where business could trade from the Isle of Man yet undertake business practices which are at odds with the Island’s stance on anti- money laundering and crime. We do not feel that this is acceptable or responsible.
Why isn’t the Isle of Man introducing a full pruden- tial regulatory regime if it is concerned? Industry innovation is moving at a tremendous pace and introducing a full regulatory regime at
this time would be both costly and may well be out of date before the rules are enacted. Further, international standards or restrictions may be introduced as the market develops. Given the rel- atively small size of the industry (in comparison with main stream finance sector) we have decid- ed to consider a proportionate anti-money laun- dering regime which can be implemented in a timely manner, protects the Isle of Man’s reputa- tion and fights crime.
“We are receiving enquiries from all over the world. These
are primarily from very credible start-up businesses who want to operate in a controlled
manner in a well-respected jurisdiction.”
Is the Isle of Man regulating digital currencies? No, it is intending to include crypto & digital cur- rencies under the Proceeds of Crime Act 2008 and the Designated Business (Registration and Oversight) Bill 2014 to ensure that the activities undertaken are subject to the anti-money laun- dering legislation. The same registration and oversight regime that will be applicable to other designated businesses will then apply to digital currency businesses.
What are the standards that the Isle of Man is looking to introduce? The anti-money laundering registration and over-
sight regime will ultimately mean that a business in this area will need to register with the Financial Supervision Commission and submit to appropri- ate reviews to ensure that the business is compli- ant with the anti-money laundering require- ments, is well managed and is run by appropri- ately skilled and knowledgeable people.
What will the regime look like? To a large degree the anti-money laundering requirements are already enshrined in legislation. The Financial Supervision Commission will review the necessary activity to determine whether that legislation has been applied appro- priately and proportionately by the business con- cerned in line with a risk based approach.
When will the rules start to apply? There will be two stages. First there will be the inclusion of digital currency activity in Schedule 4 of the Proceeds of Crime Act 2008, which will occur later in 2014. The effect of this will be that such businesses will need to comply with the Anti-Money Laundering Code. Second will be the inclusion of digital currency activity in the Designated Business (Registration and Oversight) Bill 2014 which is still subject to Tynwald approval and subsequent Royal Assent. It is expected that the Bill will be enacted during the first half of 2015. When enacted digital currency businesses will be required to register with the Financial Supervision Commission who will become responsible for oversight of their anti- money laundering compliance.
Will companies actually be given a licence to operate by the Financial Supervision Commission? No, designated businesses registered under the
5 5
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68