The primary piece of legislation that governs ICOs on the Isle of Man is the Designated Business Act (the DB Act)
The DB Act gives the Financial Services Authority overall supervisory authority over most financial businesses on the island. This even extends to estate agents. Cryptocurrency and digital assets are no different. This means the FSA will make checks to your business to ensure you are complying with due diligence codes and guidance.
Your crypto business will need to be registered with the FSA if it is caught under this legislation. The DB Act requires all financial businesses to conduct thorough Know Your Client and AML processes.
Otherwise known as KYC (Know Your Client) this is self-explanatory. It’s integral to have a good idea of who you are dealing with before you begin a business relationship with them. Here’s a useful starting point:
Your ICO must be structured so that you can (i) have a good understanding of who is buying your tokens and (ii) make a sound and reasoned decision about who to sell tokens to.
Otherwise known as AML / CFT (Anti-Money Laundering and Countering the Finance of Terrorism). Businesses aren’t expected to be sleuths, but the FSA will expect demonstrated intelligence relating to sound knowledge of what to be aware of, what makes sense and what doesn’t is absolutely expected. Think:
Your ICO should be structured such that you have integrated systems to monitor these transactions. You need: