Leading blockchain law firm, ISOLAS LLP, has continued to expand its global reach, assisting Bitso, the first exchange in Latin America to receive its full license as a Distributed Ledger Technology (DLT) Provider in Gibraltar.
The purpose-built DLT framework that applies to Bitso will now ensure that the custody, withdrawals, and trading of cryptocurrencies, available on the exchange’s platform, will operate within a regulated environment.
“After a lot of discussions, a lot of study and a lot of work, we concluded that the Gibraltar regulation was perfectly suitable since it is conveyed through the application of principles rather than rigid rules. The regulatory team of the GFSC formulated a system of nine principles for the regulation of DLT businesses, which seemed to be the best option for us because they prioritize caring for clients, providing them with greater security, transparency and trust over systems and funds,” stated Daniel Vogel, Co-founder and CEO of Bitso.
This brings with it a level of consumer protection and consumer focus which has been arguably missing in the unregulated space which continues to exist in many jurisdictions.
Bitso has been involved in the enactment of FinTech Law in Mexico and participated in many national and international forums to encourage and support the development of the right legal and regulatory framework for the space. However, after carrying out their own international assessments, the group proceeded to apply for their license in Gibraltar with the object of meeting the high standards required within the DLT regime.
Felipe Vallejo-Dabdoub Head of Public Policy, Risk and Compliance of Bitso stated that:
“Bitso will continue to promote and uphold security and reliability as two of the main core values of the company. This license is a step in that direction and a testimony of the commitment we have as a company in that regard.” He added: “When public and private sectors coordinate, the positive aspects of technologies are highlighted in favour of customers and society as a whole. In that sense, we feel privileged in working with Gibraltar authorities who have a deep understanding of blockchain technology.”
This license has positioned Bitso as one of the most innovative financial services providers in LatAm, becoming the first exchange platform from the region and the sixth company worldwide to being licensed and regulated by the Gibraltar Financial Services Commission (GFSC).
The recently granted license confirms Bitso is compliant with the nine regulatory principles set out in Gibraltar’s DLT regulations which were designed to be able to continually change and adapt to such a fast-evolving industry.
Albert Isola, Minister for Commerce, HM Government of Gibraltar, commented:
“Having met the Bitso team on their initial visit to Gibraltar as part of an international assessment process, and to have touched base with the team in New York a few weeks ago, it is a pleasure to hear that they have been awarded a DLT Providers License by the GFSC.
“I congratulate the company on this wonderful achievement and to welcoming such an established operation from Latin America who have been so involved in the industry for so long and who have pursued the most reliable standards of regulation, from Gibraltar. We always aimed at attracting excellent companies and start-ups to Gibraltar to work within this regulated framework as we feel that this will ultimately add to the legitimacy of the crypto markets as they continue to develop into the mainstream.”
Joey Garcia, the Partner at ISOLAS who heads up the firms FinTech practice and who led on the application, commented:
“The GFSC license ensures that there is a robust framework in place for the protection and security of crypto users who would like to interact and use the underlying technology or gain access to the asset class through the right interactive tools, such as a regulated exchange platform. However, another key advantage of such a forward-looking framework has been the opportunity for Gibraltar’s regime to already comply with principles and guidelines only recently developed by the Financial Action Task Force (FATF) and the new Anti-Money Laundering Directive (AMLD5), as well as the IOSCO consultation report relating to crypto-asset trading platforms. We are delighted to welcome Bitso to participate in the evolution of the regulated space in Gibraltar and to have been able to support them on their journey.”
Since the introduction of DLT licences in Gibraltar on 1 January 2018, ISOLAS has worked on the majority of applications. Recent work has included supporting Huobi in achieving their license in Gibraltar as well as LMAX Digital and Coinfloor. ISOLAS also advised RSK on its protocol layer developments, the prediction market platform Gnosis, Xapo on its e-money license and the Gibraltar Stock Exchange GSX on its development into the space through GBX.