Business 2 July 2018Dennis Wafula
Abu Dhabi issues new regulatory framework for crypto activities
The Abu Dhabi Global Market (ADGM), has come up with a new framework regulating crypto asset activities in the region—with some input from the public.
Last week, ADGM announced the finalization of its crypto assets framework, which will “regulate spot crypto asset activities.” The announcement comes a few weeks after agency conducted a public consultation over the introduction of a cryptocurrency regulatory framework. Market watchdog Financial Service Regulatory Authorities (FSRA) conducted a public consultation on May 28 concerning the proposed framework.
ADGM officials said the research was very positive and refinements have been made into the framework to make it suitable for both the trading community and the authorities. One major change was the implementation of the Daily Value Trading Levy imposed on crypto asset exchanges on a sliding scale basis.
The new rules will govern virtual currency exchanges, custodians and other intermediaries that are operating in the Abu Dhabi Global Market free zone. According to ADGM, the framework will address all the risks associated with crypto asset activities, such as those related to money laundering, consumer protection, technology governance, and custody and exchange operations.
ADGM CEO Richard Teng said that by introducing this new framework, the FSRA is taking a leading role in instilling proper governance, oversight,andtransparency over crypto asset activities. He added that the new framework would help put ADGM as a destination of choice for all crypto asset players.
The new framework is one of ADGM’s many efforts to bolster a good economic environment for crypto traders in the region. The FSRA also published a guidelineoutlining the requirements for operating a crypto asset business, exchange or custodian. According to the document, applicants that qualify for authorization under the Spot Crypto Asset Framework will be granted a financial services permission (FSP).
This new framework will not apply to initial coin offerings (ICOs). The FSRA already published a different guideline for ICOs in October 2017. ADGM has been actively involved in blockchain and related products in the last few months. They hope to create an environment that supports the full utilization of blockchain and its technologies.
Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.
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