The Isle of Man is opening its doors to entrepreneurs looking to launch initial coin offerings (ICO).
In an interview today, Brian Donegan, head of operations for fintech and digital development at the Isle of Man’s Department of Economic Development, told CoinDesk that the British Crown dependency has created a regulatory framework it believes will allow for token sales that are compliant with anti-money laundering and know-your-customer regulations.
The Isle of Man’s government has yet to formally announce the development, though it’s been moving in this direction for some time. The framework itself is based on anti-money laundering rules put in place in 2014 and 2015, Donegan said.
While regulators in places like Canada have offered some on-ramps for ICO organizers, the Isle of Man’s move perhaps goes one step further in opening the door to a range of token sales. Adel, a fintech incubator that launched an ICO after incorporating on the island, effectively served as a test-bed for the concept.
As for why the dependency is moving to capitalize on the interest in ICOs today, Donegan’s explanation was simple: there’s a significant opportunity for governments that are early movers in creating accommodative environments for ICO organizers.
“Our understanding and analysis of the ICO market is that it represents a massive vertical market for us.”
Businesses looking to launch an ICO in the Isle of Man would be required to register with the relevant authorities within the dependency and follow the applicable regulations. That said, officials would play a supportive role for businesses as they move through the token sale process.
The move comes several years after the Isle of Man introduced legislation outlining rules for businesses that handle or exchange cryptocurrencies. The Isle of Man first revealed its plans to put rules in place for cryptocurrency businesses in 2014.
The government there later embraced the tech behind bitcoin for possible public-sector applications, launching a digital registry pilot in May 2015 that was later followed by work in other areas like IoT.
This week saw the dramatic move by regulators in China to effectively outlaw ICOs, a decision that’s had an impact on both domestic and international activity around the funding model.
When asked to comment on the move, Donegan said it highlights “a real, absolute need for AML/KYC compliance specifically tailored for ICOs” – something that he believes the Isle of Man can provide.
He went on to reveal that the Isle of Man’s government has already been seeing strong interest from token sale organizers, and that the move to develop a regulatory environment for ICOs was driven in part due to the prevalence of scams in the space.
“I have to tell you, for every 10 applications we’ve had from ICO promoters over the last several months, I’d say only one of those gets through because there’s a lot of scamming going on in the industry,” he said, concluding:
“What we’re about is keeping consumers safe and keeping crime out.”