Why isn't there a bitcoin island?

Isle of Man's regulatory policies towards crypto are as odd-shaped as its famous state symbol - "triskelion", formed by three bent armored legs. On the one leg-hand, Isle’s official position is demonstratively pro-crypto. As early as July 2014 the Isle of Man Financial Services Authority (IOMFSA) had published on its web-site the brief communique peculiarly named "Virtual currencies – including Bitcoin", which said "Recognising this (Bitcoin) trend, the Isle of Man Government has already stated that it welcomes those who can meet the necessary standards ... .".

Those, who are familiar with a kind of terminology, which has been widely adapted by world's financial bureaucracy to describe the new form of decentralized digital currency, know too well that the verb "welcome" isn't part of the usual bank's official vocabulary. No wonder then, that some part of crypto-community had been inspired by a wonderful opportunity to have an "unsinkable crypto-carrier" stationed right at the Mediterranean cost of the European continent. Driven by those optimistic expectations several major crypto-companies have already announced that they plan to move their headquarters to the island.

On the other leg-hand, Isle's financial watch-dogs demonstrated some major sings of double-thoughts. In April 2015 IOMFSA changed Proceeds of Crime Act 2008 as to include Bitcoin and other crypto-currencies. It may, of course, sound like common-sense to many crypto-enthusiasts. After all, adding KYC and AML routine to their interfaces has already became a routine for almost all leading crypto-exchanges around the world. Equally, the Act's stipulation to have all transactions exceeding 12,000 EURO reported to authority may also be tolerated by crypto-users as an annoying but necessary form of government's intrusion, presumably aimed at preventing major "evil-doings".

However, there's also the third leg-hand to this story. IOMFSA also insisted on drastically reducing this limit to 1,000 EURO. That makes a whole policy of Isle "open-handedness" towards crypto-currency internally inconsistent. What Isle's bureaucrats are actually hinting is that they now suspect almost every crypto-users to be a crook. In that case island's authorities shouldn't be so engaging right from the start, which might helped many crypto-entrepreneurs to have a second, more realistic look on Isle's "real politic" toward new, decentralized digital economy. Providing the current trend of Isle's crypto-policy tightening is kept intact, Isle of Man may soon be converted into Chateau d'If for crypto-holders.

Business Notes for Startups Founders:

political climate: relatively friendly;
economic climate: relatively friendly;
regions to focus: EU;
industries to focus: FinTech, e-sports, e-games;
major limitations: hardening EU regulatory climate, high costs (including hiring) of running business, increased competition;
stimulus: low corporate income tax, excellent telecommunication infrastructure;
opportunities: to build a FinTech company orientated on EU market.
Cryptocurrencies and ICOs (outlook): legal (moderately negative).

The author: Svyatoslav (Svet) Sedov
Angel investor and founder of The First International Incubator for Silicon Valley Companies (FirstInternational.In) in the Bay Area, CA, USA.

Twitter: https://twitter.com/SvjatoslavSedof