Obtaining a DLT License in Gibraltar

The cryptocurrency business offers multiple benefits but only for those projects which operate within the regulatory framework. An increasing number of cryptocurrency projects choose crypto-friendly jurisdictions to avoid issues in the future.

Gibraltar is considered one of the most popular crypto-friendly jurisdictions. In this article we will talk about getting a DLT license in Gibraltar and why it is worth it.

What is a DLT license?

At the beginning of 2018 Gibraltar implemented a Distributed Ledger Technology Regulatory Framework (DLT Framework).

The key features of DLT regulation in the peninsula include flexibility, protection of client interests and Gibraltar’s reputation. The financial regulator welcomes new entities and industries, and promotes their growth.

The following activities are allowed under the DLT license:

• Crypto exchanges
• Wallet providers
• Custodian service providers
• DLT based marketplaces that facilitate the buying and selling of goods and services

Why get a DLT license in Gibraltar?

Benefits of the Gibraltar DLT license:

• Clear taxation system, low tax rates
• Transparent regulation. The legislation enforces 9 principles with which the cryptocurrency project must comply. Having reviewed your application, the regulator will provide various recommendations.
• Regulator’s personalized approach to each project. The authorized capital, duties and required substance in Gibraltar depend on the project specifics.
• Gibraltar is considered a prestigious jurisdiction attracting major cryptocurrency industry players

What are the downsides of the Gibraltar DLT license?

Indeed, there are also some downsides of the DLT license in Gibraltar:

Substance requirement (economic presence in the country). To get the license, one needs to have local employees and directors and to prove that the company is managed from Gibraltar.

Being a British Overseas Territory, Gibraltar intends to exit the European Union in the nearest future.

What is the DLT licensing process in Gibraltar?

The DLT licensing process in Gibraltar involves the following steps:

• Pre-application engagement: the regulator evaluates the project risks and potential to determine the project budget and capital requirements. Next, the project is assigned one of the three complexity ratings. Capital requirements, application fees, and annual state duties vary depending on the category.
• Full application: authorized capital registration, compliance with the substance requirements, execution of various forms, and implementation of AML procedures.
• Application considerations and taking a decision: the project is checked against the 9 regulator principles, and an investigation is performed to ascertain that the company will be really operated from Gibraltar.

DLT license issue time: 4-6 months.

SBSB International Law Firm advises Gibraltar for the effective implementation of your cryptocurrency project. Boasting an extensive portfolio of successful DLT license issues in Gibraltar, our lawyers will be happy to help you obtain the DLT license.