Gibraltar's government provided new details about its plan to regulate initial coin offerings in a white paper published on Tuesday.
Notably, the paper states that most tokens are not considered securities under either Gibraltar or EU law. The classification of tokens and ICOs has troubled regulators and government watchdogs, leading some countries – most notably China – to ban the blockchain use case entirely.
Indeed, the paper notes that "in many cases, [tokens] represent the advance sale of products that entitle holders to access future networks or consume future services." In other words, tokens are commercial products, not securities, the document argues.
The white paper also outlined an authorized sponsors regime, which would require every ICO issuer selling or distributing tokens in Gibraltar to appoint an individual to supervise the sale and ensure that it complies with regulations.
The release comes amid a long-running process of establishing regulatory boundaries for the use of blockchain tech within the U.K. crown dependency.
Officials from the Gibraltar Finance Centre and the Gibraltar Financial Services Commission told CoinDesk in February that the implementation of the sponsorship regime was part of their market-driven approach to ICO regulation, an attempt to avoid a one-size-fits-all approach. The regime would mean the market, not regulators, could determine what a "good" token sale looks like, according to the document.
The white paper also states that the Gibraltar Financial Services Commission (GFSC) will "authorise and supervise secondary token market operators" and will establish "a public register of such operators." Additionally, the government will regulate token-related investment advice, including "generic advice," "product-related advice" and "personal recommendations."
According to the white paper, Gibraltar intends to wrap up its blockchain-related regulatory push by the end of this year.
"A draft Bill is expected to be ready by the end of March 2018. Draft Regulations for the promotion, sale and distribution of tokens should be ready in May 2018. The last of the three Regulations should be completed by the end of October 2018," the paper says.