Financial Authority of Abu Dhabi Global Market Introduces Crypto Regulatory Framework

Financial Authority of Abu Dhabi Global Market Introduces Crypto Regulatory Framework

A new regulatory framework for crypto-related activities has been introduced by the financial authority of Abu Dhabi Global Market (ADGM), following a public consultation. A guideline has also been published by the financial watchdog on how cryptocurrency activities are now regulated.

ADGM announced this week that it has introduced a new framework to regulate crypto activities, including those undertaken by custodians, crypto exchanges and other intermediaries. AGDM explained:

The framework is designed to address the full range of risks associated with crypto asset activities, including risks relating to money laundering and financial crime, consumer protection, technology governance, custody and exchange operations.

The launch of the new regulatory framework follows a public consultation on the introduction of a framework by the FSRA (Financial Services Regulatory Authority) at the end of May. Several refinements and changes have been made to the regulatory framework after considering public comments, according to the announcement. The daily value trading levy will be imposed on crypto exchanges on a “sliding scale basis”, the announcement details.

The CEO of AGDM’s FSRA commented:

 By introducing a comprehensive and best-in-class regulatory framework, the FSRA is taking a leading role in instilling proper governance, oversight and transparency over crypto asset activities, positioning ADGM as a destination of choice for crypto asset players.

The financial watchdog has also published a 34-page guide to explain the new regulatory framework. The document details the requirements for operating a crypto asset exchange, business or custodian.

According to the document, applicants that manage to qualify for authorization under the SCAF (Spot Crypto Asset Framework) will be granted the permission to continue the regulated activity of operating a crypto asset business. According to the Spot Crypto Asset Framework:

Market intermediaries (e.g. broker-dealers, custodians, asset managers) and crypto asset exchanges dealing in or managing crypto assets will need to be licensed/approved by FSRA as OCAB holders. Only activities in accepted crypto assets will be permitted.

The regulatory framework does not apply to ICOs (Initial Coin Offerings), as the FSRA had already published a separate document for ICOs last October.

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