How a DLT license adds to COTI’s value offering
We believe we are approaching a time when all distributed ledger technology (DLT) providers will need to obtain legal licensing. To this end, COTI would like to remain ahead of the curve and be fully compliant with all of its activities from the onset.
As of 1 January, 2018, any Gibraltar-based company dealing in DLT is required to obtain legal authorisation from the Gibraltar Financial Services Commission GFSC . COTI is proud to be acting from Gibraltar and will adhere to DLT regulations in all areas of its business conduct in full transparency with the GFSC.
With respect to COTI tokens, and the handling of digital currencies more generally, COTI is laying the licensing foundations that will enable it to comply with existing regulatory frameworks.
COTI welcomes greater regulatory clarity and believes digital currency-specific frameworks will serve as a catalyst for the mainstream adoption of digital currencies.
In the interim, COTI is adopting stringent banking industry compliance standards to ensure that its digital currency-related activities do not serve as a conduit for money-laundering or other illicit activity.
The COTI exchange has sought counsel with a number of leading legal firms and accounting specialists to ensure that we set a strong benchmark for regulatory compliance.
We recently sat down with Eyal Wagner, COTI’s legal and compliance advisor, to discuss COTI’s regulatory agenda.
- Why is regulation important for digital currencies?
It legitimises cryptocurrencies and makes them sustainable by enforcing anti-money laundering (AML) regulations and client protection frameworks.
2. Why are KYC and AML standards important for COTI?
Because we have built a payment ecosystem at COTI and operate within the financial services domain, it is essential to identify parties involved in payment transactions. KYC and AML procedures also play a significant role for merchants and traditional financial systems.
3. How does a DLT license add to COTI’s value offering?
The COTI exchange will be regulated by a third party that will ensure that all transactions are in line with the law. This is a huge consumer protection aspect that is missing in the cryptocurrency industry.
4. What is involved in securing a DLT license?
A full assessment of COTI’s business model, team qualifications and exchange procedures are some of the key points involved in securing a DLT license
5. Why has Gibraltar been selected as the jurisdiction?
Gibraltar is a pioneer in terms of regulating innovation in the digital currency sphere and providing guidance for financial service-oriented businesses.
6. What does the license enable COTI to do which it couldn’t do before?
COTI aims to offer its services from Gibraltar under the supervision of the Gibraltar Financial Services Commission (GFSC). On the heels of new regulatory frameworks effective 1 January, 2018, this is only possible for GFSC-approved businesses.
7. Are there any other regulatory frameworks that COTI works within?
We are looking into other jurisdictions, such as Canada and Japan. Please stay tuned for additional developments in our global expansion
8. What is your answer to proponents of an unregulated digital currency environment?
This type of approach won’t scale and the public deserves access to the promising future of digital currencies. Offering financial services to the public needs to occur within a regulatory environment in order to uphold consumer protection standards
9. Could regulation cause COTI to revert back to the limitations of traditional banking systems?
COTI aims to combine the very best of digital currencies and traditional payments. That being said, not everything in the traditional banking space is objectionable and not everything in the cryptocurrency space is favorable.