Written by; Philip Vasquez, co-founder of Digital Asset Management Limited (dam.gi), a regulated broker/dealer and custodian of digital assets in Gibraltar, and an Associate at TSN Law (tsnlaw.com). Philip is also a board member of the Gibraltar Federation of Small Businesses.

As someone who has been involved in the distributed ledger technology (‘DLT’) industry for the past few years, I have found it hard to write up an article on the DLT sector for a while now.

The reason has something to do with the simple quote often attributed to Plato that ‘wise men speak because they have something to say; fools because they have to say something’. I have been reluctant to write anything longer than a tweet on the DLT sector recently because I have felt that I am neither the wise man nor the fool. I wouldn’t classify myself as an expert and I don’t think anyone would want to be a fool.

The reality is that projects and even jurisdictions have been propagating their progress and spinning positive activity over the past 18 months. Over that same period, Bitcoin has supposedly died 126 times according to various media articles and coverage announcing the eternal crash of cryptocurrencies and no use for the underlying technology.

The point I am making here is that there is so much media attention on this industry, that it is incredibly difficult to separate the noise from signal and the wise men from the fools.

In giving a truly transparent overview of Gibraltar’s growing involvement with DLT and cryptocurrencies over the past 18 months, I hope that I will be the better between the wise man and the fool.

Licensing and Regulation


Gibraltar created purpose built regulations in late 2017, effective January 1st 2018, for businesses who used DLT to transmit or store value for others. 18 months since these regulations came into force, Gibraltar now has approximately 10 licensed DLT businesses who are registered with the Gibraltar Financial Services Commission (‘GFSC’).

The licensed entities include large and recognised international exchanges such as Huobi, eToro X, CEX and Bitso as well as local players Gibraltar Blockchain Exchange (GBX) and Digital Asset Management Ltd (DAM).

There are a number of other entities going through the regulatory process with the GFSC so the count of the number of licensees is expected to grow before the close of 2019. There has also been entities scaling back operations in Gibraltar, with other jurisdictions experiencing similar set-up and scale downs.


The Gibraltar Government in 2018 began consultations on introducing regulations that govern Initial Coin Offerings (ICOs) in Gibraltar. Described at their most basic, ICOs are a fund raising method for projects using cryptocurrencies and DLT.

These regulations were considered by Gibraltar at the time as there were few jurisdictions internationally that were looking to regulate this form of fundraising model given its incredibly nascent existence. It is not known when these regulations may become law.

Financial Crime Prevention

Gibraltar was one of the first jurisdictions globally to introduce a legal obligation on those businesses and projects using cryptocurrencies and DLT (including ICOs) to carry out due diligence checks on customers and reporting of financial crime concerns to the authorities.

These changes to the Proceeds of Crime Act 2015 which became effective in March 2018 introduced proactive obligations on these businesses in Gibraltar to combat financial crime. Similar obligations are now being introduced throughout the European Union in the form of the Fifth Anti-Money Laundering Directive (AMLD5) but will not need to be implemented until the 10 January 2020.

Gibraltar has also recently undergone a Moneyval onsite visit, where DLT and virtual assets did not form part of the assessment as they are outside the scope of AMLD4. The Financial Action Task Force has also come up with recommendations in relation to global virtual asset providers in respect of financial crime prevention.

Crypto Funds

Activity on cryptocurrency funds in Gibraltar has been more discreet with a rumoured amount of approximately 5 to 10 funds with direct or indirect exposure to cryptocurrencies and other DLT equity investments.

These funds are understood to be a mix of both Experienced Investor Funds and Private Funds. As of around October 2018, any new collective investment schemes being set up in Gibraltar would likely be set up as an Experienced Investor Fund following the adoption of the Code of Conduct for Crypto Funds by industry body, the Gibraltar Funds and Investments Association.

This move effectively only allows qualified investors to participate in the fund, as opposed to Private Funds which ordinarily do not have a restriction on the ‘type’ of investor that can subscribe.

Community and Activity

Gibraltar’s DLT and cryptocurrency community has definitely consolidated along with the 2018 cryptocurrency bear markets. Retail involvement and interest is notably down but there still exists a persistent community in Gibraltar in respect of advisors and businesses actively involved in this sector.

As both a legal adviser on DLT matters for TSN Law and an advisor on the brokering, custody and bespoke management of digital assets themselves with Digital Asset Management Ltd (DAM) I regularly interact with various other professionals in Gibraltar’s community, bankers, regulators and entrepreneurs, and there continues to be a solid and knowledgeable community naturally growing.

Gibraltar’s community has the opportunity of using its knowledgeable professionals and network to assist most DLT projects with their ambitions, particularly through a collaborative approach.

Notably, the amount of ICOs that have launched from or involving Gibraltar has gone down considerably from peak activity of late 2017 and early 2018. This is in keeping with global trends and sentiment on ICOs more generally.

Some question whether ICOs will return as a prominent source of financing projects with cryptocurrencies or whether they will be replaced by one or both of Initial Exchange Offerings (IEOs) and Security Token Offerings (STOs).

Other News

Worth noting is how some projects in Gibraltar have gone into liquidation and how this has presented different opportunities for liquidators, lawyers and regulated digital asset custodians such as DAM.

The University of Gibraltar is offering courses in Blockchain & Smart contracts being delivered by the likes of individuals from Coinsilium and RSK. Also worth noting is that Xapo, one of the largest custodians of Bitcoin in the world (who recently sold its institutional business to Coinbase) and poised digital bank, has publicly placed an interest in taking over key units in Casemates Square.

The past 18 months has also seen a Bitcoin ATM come and gone in the World Trade Center, as well as the opportunity to pay for goods in Bitcoin with local retailer Supernatural (no longer available).

In my wise-fool’s summary, the past 18 months have been active for Gibraltar’s DLT and cryptocurrency sector. Seeing the stability of the sector now establish itself at an organic pace of growth is definitely what has been needed.

By and large, Britain’s departure from the EU will not affect Gibraltar DLT licensees ability to carry out their services in other countries as regulations around DLT and virtual currencies by and large do not exist at a European level as is presently the case with online gaming. Whilst this could change, there are opportunities at the moment for businesses to be regulated and operate internationally from Gibraltar.

An empty vessel makes the loudest sound, so they that have the least wit are the greatest babblers


As time goes by, I see myself facilitating increasing use cases for cryptocurrencies and the underlying technology. I do not believe that DLT is the panacea for so many economic, banking and societal ills that a majority of media content tries to portray.

Yes, the truth is that DLT is bringing real world solutions to financial problems already but at the moment it is mainly for fringe use cases -i.e. solving problems for a minority of people. Anyone professing it is solving much more than that right now is probably babbling.