Gibraltar's Government Targets Crypto Market Manipulation With New Rules

The Gibraltar Financial Services Commission (GFSC) is cracking down on crypto market manipulation with new rules addressing the distributed ledger technology sector.

This new regulatory principle by the British overseas territory’s financial regulator states that a distributed ledger technology (DLT) provider must maintain the integrity of any market in which it participates, according to a press release Wednesday.

The principle, which crypto companies will have to follow, addresses a longstanding concern. Market manipulation has been an “increasing risk” among DLT companies, Albert Isola, minister for digital and financial services at Gibraltar’s government, said back in 2020.

Market integrity is essential for a fair, orderly and efficient market and factors in monitoring for manipulative trading and other forms of market abuse, high disclosure standards and robust consumer protection, a note by the government said.

The legislation states that a DLT provider will need to implement measures to prevent, or

mitigate the effects of any type of manipulation of prices, liquidity or market information and prevent employees from engaging in insider trading, according to guidance published alongside the policy.

The new legislation was drafted with the help of a specialist market integrity working group made up of government representatives and leaders in the blockchain and digital asset space.

The focus on market integrity is another principle the country's financial regulator is emphasizing, on top of another nine that companies are already required to follow. These principles emphasize integrity, business management, governance, financial crime, contingency arrangements and more.

Back in 2017, Gibraltar released a regulatory package for distributed ledger technology that allowed crypto companies to get a license if they complied with the existing principles.