Comparative Guides

Welcome to Mondaq Comparative Guides - your comparative global Q&A guide.

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4. Results: Answers
Financial crime
What provisions govern money laundering and other forms of financial crime in your jurisdiction and what specific implications do these have for fintech companies?

Answer ... Businesses operating from within Gibraltar must comply with the Proceeds of Crime Act 2015 (POCA). POCA is designed to prevent the abuse of the financial system for the laundering of illicit money and the financing of terrorism. Therefore, businesses falling under the scope of POCA (also known as ‘relevant financial businesses’) must apply due diligence measures, which vary in accordance with the degree of risk and likelihood that funds will be laundered or used for the financing of terrorist activity. Fintech businesses that carry out token sales are specifically brought within the scope of POCA by virtue of a definition which states that “undertakings that receive, whether on their own account or on behalf of another person, proceeds in any form from the sale of tokenised digital assets involving the use of distributed ledger technology or a similar means of recording a digital representation of an asset” are relevant financial businesses.

Moreover, Principle 8 of the DLT Regulations states that a DLT provider “must have systems in place to prevent, detect and disclose financial crime risks such as money laundering and terrorist financing”.

Therefore, business falling within the scope of the DLT Regulations will have to demonstrate compliance with POCA before they can start operating. This pre-approval mechanism brought in by the DLT Regulations creates a robust framework to prevent money laundering and terrorist financing.

The result is that the public perception of the fintech industry in Gibraltar is very positive, and far from the lack of trust that is typical in jurisdictions where companies deploying or utilising DLT as part of their business are not yet regulated under a dedicated regulatory framework.

For more information about this answer please contact: Anthony Provasoli from Hassans