Gibraltar Introduces New Regulation Against Crypto Manipulation

Gibraltar, a British overseas territory, has released a new guideline for cryptocurrency businesses operating in the region, to combat market manipulation.

The Gibraltar Financial Services Commission (GFSC) published the modified regulatory principle on Wednesday, stating that all DLT (Distributed Ledger Technology) providers that operate within the country should maintain the integrity of the market.

According to the regulatory principle, crypto firms operating in Gibraltar must put measures in place to prevent manipulation of prices, liquidity or market information. Businesses are required to also prevent insider trading activities by their employees.

Regulators globally have expressed concern about the market manipulation supposedly plaguing the crypto industry. It is also amongst the reasons the U.S. Securities and Exchange Commission (SEC) gave for rejecting several spot Bitcoin exchange-traded fund (ETF) applications.

Albert Isola, Gibraltar's Minister for Digital and Financial Services, said, “Gibraltar continues to lead the way in defining standards in the virtual asset sector. As is the case with traditional markets, I have long believed that defining standards of market integrity would be required for the continued development and adoption of this industry."

"Like any other market, the virtual asset market must operate in a manner that is fair, orderly and efficient, whilst enhancing the levels of trust that firms in the regulated sector currently enjoy. We must ensure that we provide operators with a framework that enables them to maintain the same high standards as operators do in traditional industries.”

Kerry Blight, CEO of the Gibraltar Financial Services Commission, commented, “Since the introduction of the DLT regulatory framework in 2018, we have worked with government, specialist advisors and industry to refine our guidance and ensure it is suited to this rapidly developing sector, providing both regulatory certainty to DLT Providers and robust protection to their growing consumer base."

"The Market Integrity Principle and Guidance Note further strengthen the framework. They introduce a number of key responsibilities, designed to enable firms to root out insider trading and other forms of market abuse, improve standards around disclosure and transparency, and ultimately safeguard the rights and interests of consumers."

Gibraltar has also served as an attractive spot for cryptocurrency exchanges. Last year, global exchange Huobi also announced that it would move its spot trading operations to Gibraltar.