Gibraltar has reportedly introduced a new regulatory package for distributed ledger technology (DLT) service providers. The new law elaborates on the responsibilities of crypto companies regarding threats of market manipulation and insider trading.
DLT providers get more work
The new law was drafted by a special working group that includes both government officials and crypto experts and establishes operational guidelines to combat market abuse.
DLT providers are now expected to monitor the movement of significant virtual asset holdings. They are also expected to publish information that may be aimed at generating false or misleading market signals, and to investigate whether algorithmic-based systems are being used to generate misleading data about transaction volumes.
Preventing Insider Trading
In addition, with the new law, the government also wants crypto companies to seek and try to prevent insider trading activities. They should also inform the public as soon as possible about relevant information. The newly proposed trading standards also include taking measures to reduce liquidity providers and the ability of market makers to significantly change asset prices.
Gibraltar’s Minister of Digital and Financial Services, Albert Isola, said the same of the new regulations:
“The introduction of the 10th Principle, with significant industry input, will further develop our regulatory framework. It provides licensed companies with clear guidance on the standards required of them, as well as consumer and legal protections.”
Gibraltar has a small population of about 34,000 people. In recent years, the British Overseas Territory has emerged as a favorable and attractive location for crypto. Among other things, this has caused crypto exchange Huobi to move its spot trading activities to its Gibraltar-based affiliate.