Gibraltar to Combat Crypto Market Manipulation With New Rules

  • The legislation will implement new standards for crypto market integrity in Gibraltar, designed to combat insider trading and market manipulation in the sector.
  • DLT providers will now be required to seek out and prevent insider trading, and the publication of misleading information aimed at manipulating the crypto market.
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The British overseas territory of Gibraltar has implemented new regulations for distributed ledger technology (DLT) providers to combat market manipulation, the government of Gibraltar said in a press release on 27 April.

According to the announcement, the new rules aim to set the “highest standards for market integrity”, and crack down on cryptocurrency market manipulation by setting up operational guidelines for preventing market abuse. It also noted that the new legislation was crafted by a special work group comprised of both government officials and industry experts. The CEO of Gibraltar’s Financial Services Commission (GFSC), Kerry Blight, said in a statement:

“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.”

A Guidance Note from the GFSC explained that DLT providers will now be expected to monitor the movement of large crypto holdings, as well as the publication of false and misleading information. They will also have to investigate whether algorithmic-based systems are being used to generate false transaction volumes data.

Crypto companies will also be required to seek and prevent any insider trading on their platform, and inform the public regarding any relevant information “as soon as possible”. The new legislation will also put in place measures to significantly reduce the capacity of liquidity providers and market makers to alter the prices of crypto assets.

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