As part of the World Trade Center Gibraltar’s ongoing campaign featuring “the Rock’s” many attractive opportunities for FinTech and FinServ companies, I went looking for local experts who could speak authoritatively on Gibraltar’s DLT landscape.

Anthony Provasoli is a Partner and FinTech Department Co-Lead at Hassans International Law Firm Limited, based in Gibraltar. Both Chambers’ and Legal 500 rank him as a Band 1 or Tier 1 leading lawyer in the Fintech industry (which means he is categorised as “the best”, for those laymen among us).

He is also one of the first individuals to have lobbied the Gibraltar Government and the Gibraltar Financial Services Commission (GFSC) for the regulation of Virtual Asset Service Providers back in 2014. He was involved in the consultation process to bring about Gibraltar’s highly innovative DLT Regulatory Framework and was also amongst a group of individuals who personally assisted in drafting the Guidance Notes for those landmark DLT Regulations which came into force in January 2018.

I called Anthony up and asked him to tell me the story of how it all began.

“That was when I became aware of how significant the [cryptocurrency] industry already was and how much potential it had to grow exponentially,” Anthony told me. “All the people there were very passionate about it. I was already hooked myself on it, as well as
on how Gibraltar could get involved as a jurisdiction.”

The problem was that there was no clearly defined industry rubric for DLT and blockchain at the time. It was FinTech-related, but it didn’t fit precisely within any of the other regulatory regimes.

Inspired by the potential of the technology, Anthony began his quest to bring DLT to Gibraltar and, after much work, was finally rewarded with a highly positive response from the Gibraltarian government and regulator to get regulations in place and bring DLT to Gibraltar properly.

What followed was the establishment of a special DLT team inside the GFSC — the Gibraltar Financial Services Commission — which would take on the role of understanding this new technology.

The rest, as they say, is history, dotted by such momentous milestones as the arrival of the esteemed regulatory and IT professional, Siân Jones, to assist in getting the regulations worked out, as well as Hassans’ and other firms’ assistance in putting together the Guidance Notes for what would eventually become known as the Nine Principles of DLT.

The result was an innovative approach to DLT regulation which was neither prescriptive nor damaging to innovation, in a field which is inherently innovative by nature.

A DLT company can choose to be regulated in Gibraltar. The benefit of being regulated, of course, is that it ensures the company is implementing all the best practices, which helps both clients and the DLT company itself.

“You don’t necessarily need to be a high profile or well-established business [to get permission to operate],” Anthony said. “The GFSC is happy to sit down with big players such as eToro and Huobi, but at the same time is also willing to sit down with smaller and newer DLT-focused businesses.”

“We’re working with a few big names, and a number of exciting start-ups, at the moment who haven’t received their permissions yet.”

In our previous interview with regulatory expert Targ Patience, he told us a similar story.

DLT companies are flocking to the Rock, while other jurisdictions scramble to get some sort of framework in place which resembles what Gibraltar has had for years.

But they keep coming up short.

“Gibraltar was the first jurisdiction in Europe, and one of the first in the world, to specifically regulate DLT financial services business,” Anthony said. “Gibraltar’s legislation came into force in January 2018, with the bill being passed into law several months earlier.”

In comparison, Malta’s bill was not passed until July of 2018.

“Gibraltar stole the march somewhat,” he said. “Soon thereafter, other jurisdictions in Europe such as [Malta] and then Estonia, started working on their own regulatory frameworks and they started to get a lot of interest, but none has been as successful as the Gibraltar model in my view. We’ve also been getting a lot of clients who have started the process of setting up in other jurisdictions and applying for the relevant regulatory permissions but eventually growing frustrated and moving to Gibraltar.”

“In my view, none of the regulations out there even come close to the Gibraltarian model, because the Gibraltar model was specifically designed for this type of business.

“Now the EU is talking about potential regulation of Virtual Asset Service Providers and a proposal for EU wide regulation of crypto assets was recently leaked on social media. It is merely a proposal at this stage, however, and it will be several years before this proposed regulatory framework is developed to a point where it can be brought into force. It is interesting that a lot of the regulatory requirements being put forward in this proposal are already covered by Gibraltar’s DLT Regulatory framework which has been in place for a number of years already but it is also important that Gibraltar keeps a close eye on how the industry is evolving, so as to ensure that our regulations remain relevant and appropriate. As part of the executive committee at the Gibraltar Association of New Technologies (GANT) we are working towards this constantly.”

“Gibraltar regulations go beyond other existing regulatory models out there. They go much further. They look at the financial resources that the firms have in place and whether they have the relevant experience and expertise to operate a regulated crypto business. They look at how they protect the consumer, how they safeguard the customer’s funds, what their disaster recovery procedures are, etc.”

There is one thing you’ll learn quickly about business people operating from the World Trade Center Gibraltar: Very few of them have a “boring” story
when it comes to moving to “the Rock”.

Targ Patience’s story is one of the most exciting ones. He sailed down to Gibraltar in 2018 with his wife Tereza, a talented lawyer whose hair is dyed turquoise. Why do I mention the hair? Because their 57’ yacht is painted the same colour.

Do you see what I mean about exciting?

Welcome to the World Trade Center Gibraltar.

When I say they sailed down to Gibraltar, I mean that they did the actual sailing themselves — Targ is the yacht’s captain, and the boat is their home.

“The sail down from the UK in 2018,” Targ said, “was actually a source of some adrenaline when we got caught in a Force 9 gale on our way out of the English Channel into the Bay of Biscay (that’s around 80 kph winds and 8 metre waves, to the non-initiated). Fortunately, after taking some shelter in the lovely bay of Brest for a couple of days, we had a blissful sail across Biscay.”

The yacht’s official resting place, now, is in one of Gibraltar’s two luxury marinas.

In 2018, Targ and Tereza had both been headhunted for positions with a DLTfocused group of companies operating from Gibraltar. The group was planning to develop “exciting and innovative DLT-based solutions for legacy securities market issues”.

Targ was an obvious choice for the position of Group Chief Compliance and Regulatory Officer. His CV includes things like being a keynote speaker for the Asset and Liability Management Association (ALMA), ISITC Europe, and the Institute of Leadership and Management (ILM). He delivered professional
instruction in financial market infrastructure and regulation for years, including EMIR, Dodd-Frank, Basel III, MiFID II and SMCR. He is a veteran of corporate and investment banking, helped design the world’s first FX Clearing House for LCH in London, has extensive experience as an investigations analyst in currency derivatives, and was running his own boutique consulting firm in London — with clients on his books such as Barclays Investment Bank, RBS Group and Goldman Sachs — when he got the call from Gibraltar.

“Gibraltar is extremely hospitable to those DLT companies that wish to build their businesses with the Nine DLT Principles at the core of their operations,” Targ told me.

He explained that the Gibraltar regulator — the Gibraltar Financial Services Commission, or GFSC — uses a “principles-based” approach, commonly referred to as The Nine Principles or The Nine Core Principles of DLT.

“The benefit of the principles-based approach to the Gibraltar DLT regime,” Targ said, “is that it provides an adequate framework within which regulated firms must operate, whilst still allowing enough flexibility for companies to efficiently run their businesses in such a novel and evolving industry and market. The Gibraltar DLT framework specifically presents a unique opportunity for firms to establish themselves in a highly-regarded jurisdiction that fosters innovation without being bogged down by rigid and prescriptive rules that may not always work for every type of business.”

Gibraltar — a Mediterranean country under British rule and boasting around 300 days of sunshine a year — is a small place, its population not reaching 35,000 people. It is highly innovative, and a hub for Financial Services and FinTech companies.

When speaking to local business people about Gibraltar, a common theme comes up: The regulators and officials are highly accessible.

“We have found the local regulator to be very open, communicative and helpful when it comes to completing and submitting a DLT License Application, as well as during the life of a DLT Provider’s business,” Targ said.

“The Partners in Dolya have worked in numerous evolved jurisdictions around the world throughout their careers – including the UK, France, Belgium, Spain, South Africa, the United States and Hong Kong, to name a few – and Gibraltar definitely has some of the most accessible national authorities that we’ve come across.

“Apart from the engaged application process and continued assistance, we’ve seen that customers of those providers established in Gibraltar take confidence from the fact that DLT companies here are licenced and subject to proper regulatory oversight.

“There is an enormous benefit from operating in Gibraltar, thanks to it having an internationally recognised and respected regulatory framework and experienced competent authorities.”

When the workday is done, Gibraltar offers a wide range of activities in order to relax and enjoy life.

Surfing, paddle boarding, snorkelling, even visiting “countless shipwrecks” — these are merely a drop in the vast ocean of things to do in Gibraltar.

“We have lots of friends with boats,” Targ said, “and there are huge pods of dolphins that live in the Bay of Gibraltar who come to swim alongside on almost every trip out.”

Located just a few seconds’ walk away from the prestigious Ocean Village luxury marina and resort Ocean Village, many executives at the World Trade Center will take a lunch or dinner at such esteemed restaurants as the Little Bay, Gauchos Steakhouse (not part of the UK chain, but an independent restaurant), or even the renowned and opulent Barbary Restaurant located on the top floor (aka “Deck 7”) of the Sunborn Superyacht Hotel. (I was once CEO of that superyacht myself, by the way.)

“When we’re not splashing out, we generally like to alternate between many of the awesome bars, restaurants and cafes around Ocean Village. The Yard is a wonderful bar specialising in gins (their menu is mind-boggling in its variety), with gorgeous decked seating, out over the water in the bay. I could go on, but there are so many great places to eat, drink and entertain in the area…and I’ve not even mentioned all of the amazing restaurants and bars
just over the border in Spain!”

Hiking, eBiking, running, mountain biking, miles of tunnels to explore — and that’s not even mentioning what another WTC-based exec described as the “Andalucia Playground” just across the border, featuring “some of Spain’s best beaches, cities and hilltop villages as well as amazing national parks”.

“Gibraltar is genuinely a land of opportunity,” Targ said, “with an incredible quality of life, a very progressive, accessible and business-friendly government and regulator, and a thriving business community. We feel genuinely privileged to live here, and could never have had this kind of lifestyle in the UK.”

If you wish to know more about moving your DLT business to this forward-thinking, welcoming and highly approachable jurisdiction, reach out to me using the details in the “About the Author” section below.

ABOUT THE AUTHOR

About the Author
Brian Stevendale is a Senior Advisor to the World Trade Center Gibraltar and former CEO of Sunborn Superyacht Hotel.
https://www.linkedin.com/in/brian-stevendale-57560a19/

To find out more about moving your DLT-focused business to the World Trade Center in Gibraltar, contact:

Telephone. +350 200 63333. Email: mariela.gancheva@worldtradecenter.gi

Mr Jarvis’s gaming business success-story is a typical one for this area. “If you are a high-quality B2C Operator or B2B supplier to the online gaming industry,” he said, “Gibraltar remains a leading jurisdiction for both the business and for the owners and executives behind it. Gibraltar has a business-friendly approach that makes it easy for good companies to set up and operate. There are many local advisers ready to support set-up, and the relevant government representatives and their teams are accessible and practical in their support.”

As a twenty-year veteran of the team who built the World Trade Center in Gibraltar as well as Ocean Village, I was well aware of the Rock’s conduciveness to the gaming industry. That was one of the reasons we decided to build the 253,600 square feet, seven-storey structure in the first place, and to do it under the esteemed World Trade Center Association’s umbrella.

But I’m an Investment and Property Development bloke, not a lawyer or the CEO of a gaming business.

So, I decided to reach out to a few of our World Trade Center partners to get their opinion on living and working in Gibraltar.

Monika Thys is the Practice Development Manager at Ince Gibraltar. She explained to me the basic procedure for getting a gaming biz up and running on the Rock.

Licensing is the first step, but to get a license, the prospective company needs to present a thorough and sound business model to the Gaming Regulator who will review it. “There are various elements involved,” she told me, “not only regulatory. You need a business plan, due diligence on shareholders and directors, risk assessments, etc.” And yet the general, unofficial feel in Gib is that setting up a gaming business is easy.

Well, that’s because it is. From all appearances, the Gibraltarian government is both supportive and encouraging of new gaming companies that come to Gibraltar with the intention of doing serious business. Although no one says it officially, from personal observations I can tell you that it seems far less complicated than Malta. In Gib, you get first-class standards, allowing your gaming business to thrive. One new operator told us that one of the reasons they are moving their business from Malta to Gib is that they operate in Japan. That same operator told us that Malta wasn’t happy with them operating in Japan, but that there’s no problem with it in Gibraltar.

Mr Howitt said, “The gambling industry is a very large part of the Gibraltar economy, contributing around 25 per cent of GDP, and employing some 3,200 workers. Companies based here pay corporation tax (10 per cent), PAYE and a low rate of gaming tax (0.15 per cent of gross gambling yield). There is no capital gains or VAT and this is very attractive to online businesses.

“Government sources suggest that at least 75 per cent of UK online betting takes place in or from Gibraltar. Despite a difficult economic environment, betting and gaming operators continue to focus ongrowth on a world wide scale and particularly online, with Gibraltar astheir home jurisdiction.”

There are currently 35 approved B2B and B2C gaming licenses in Gibraltar.

Julian Jarvis of Pragmatic Play said, “The Gibraltarian jurisdiction is probably the most experienced in the world at regulating online gambling, and this has focused on high-quality participants in the industry. Whether you are an industry giant or upcoming growth business, Gibraltar is a licensing jurisdiction you will want to be in as part of your overall business strategy.”

He should know. His CV reads like a literal Who’s Who of gaming and legal experience: Prior to moving to Gibraltar, Mr Jarvis was a senior in-house lawyer with AOL Europe (part of AOL Time Warner), based in London and managing a team of EU lawyers. He has worked in multiple gamingrelated industries on the Rock, including Odobo, the first HTML5 games developer platform, and is the founder of Rockchain, one of the first sponsor firms on the Gibraltar Exchange (GBX).