Gibraltar published a regulatory amendment requiring crypto companies to prevent insider trading. The country thus wants to combat attempts to manipulate the market.
The Gibraltar government released new rules for the cryptocurrency industry aimed at preventing market manipulation and insider trading.
The Gibraltar Financial Services Commission (GFSC) issued special guidance for cryptocurrency companies, which calls on distributed ledger technology (DLT) providers to ensure high standards for customers to access crypto services.
The government expects DLT providers to monitor the movement of significant amounts of virtual assets and publish data that could be aimed at generating false or misleading market signals.
The government requires crypto firms to look for and prevent any insider trading activity and inform the public of any relevant information. The new trading standards also include taking steps to reduce the ability of liquidity providers and market makers to significantly alter asset prices.
“We were the first jurisdiction in 2018 to launch the legal and regulatory framework, and we’re now the first jurisdiction to launch a framework for market integrity,” Gibraltar’s Minister for Digital and Financial Services Albert Isola told CNBC.
Although no official figures have been released, Isola said that a very large portion of crypto firms are getting approval from Gibraltar’s regulator. This approach has helped the country attract about 15 digital asset service providers, including the eToro and Huobi exchanges, as well as digital bank Xapo. Blockchain startup Valereum is planning to merge with the Gibraltar Stock Exchange to create a market where shares can be bought for crypto.
Market manipulation negatively affects investors’ level of trust in DLT providers. For example, Coinbase, a major cryptocurrency exchange, was recently suspected of insider trading.