FATF ‘travel rule’ transposed into Gibraltar law

The Government of Gibraltar has today published the Proceeds of Crime Act 2015 (Transfer of Virtual Assets) Regulations 2021 (Transfer of Virtual Assets Regulations). The Transfer of Virtual Assets Regulations transpose into Gibraltar law, the commonly known FATF ‘travel rule’ and introduce a number of new terms such as 'virtual asset service provider', 'virtual asset transfer' and 'virtual asset account'.

The 'travel rule' requires virtual asset service providers (VASPs) such as cryptocurrency exchanges, digital wallet providers, over-the-counter (OTC) trading desks and other businesses dealing with crypto assets, to ensure that certain customer information is obtained, disclosed and transferred between counterparties in a crypto asset transaction. DLT Providers in Gibraltar are required to comply with the Transfer of Virtual Assets Regulations.

The regulations apply to transfers of virtual assets (i.e. crypto assets) where the transaction has a value equal to or in excess of €1,000.

The Proceeds of Crime Act 2015 (POCA) has also been amended today to include the definition of 'virtual asset' which is defined as:

“a digital representation of value that can be digitally traded, or transferred, and can be used for payment or investment purposes, but does not include–

(a) digital representations of fiat currencies; or

(b) financial instruments specified in paragraph 46 of Schedule 2 to the Financial Services Act 2019.

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The Transfer of Virtual Assets Regulations and the latest amendments to POCA complement Gibraltar's bespoke regulatory framework for distributed ledger technology (DLT) businesses.