The financial authority of Abu Dhabi Global Market has launched a regulatory framework for cryptocurrency activities following the completion of a public consultation. The market’s financial watchdog has also published a guideline explaining how crypto asset activities are now regulated.
Crypto Regulatory Framework Launched
Abu Dhabi Global Market (ADGM) announced this week that it has launched a “framework to regulate spot crypto asset activities, including those undertaken by exchanges, custodians and other intermediaries in ADGM.”
ADGM is the international financial center in Abu Dhabi which collaborates with global financial centers, institutions, and regulators to “develop and supports member institutions with the regulatory framework, legal jurisdiction and attractive business environment they need for sustainable business growth,” its website describes. The Financial Services Regulatory Authority (FSRA) is the market’s watchdog. ADGM wrote:
“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.”
FSRA Takes the Lead
This regulatory framework follows the completion of a public consultation on the introduction of a crypto regulatory framework by the FSRA on May 28. By incorporating public comments, “several refinements have been made to the regulatory framework, with a key change being the implementation of the daily value trading levy imposed on crypto asset exchanges on a sliding scale basis,” ADGM’s announcement details.
Richard Teng, the CEO of ADGM’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 FSRA said in February that “virtual currencies, although not legal tender, are gaining interest globally as a medium of exchange for goods and services,” Reuters reported.
New Crypto Framework Explained
The FSRA has also published a 34-page guide for the regulation of crypto asset activities in ADGM. The document explains the regulatory framework for crypto assets including the requirements for operating a crypto asset business, exchange or custodian.
“Applicants that qualify for authorization under the Spot Crypto Asset Framework will be granted an FSP [Financial Services Permission] to carry on the regulated activity of OCAB [Operating a Crypto Asset Business],” the document describes. 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 document also clarifies that this framework does not apply to initial coin offerings (ICOs). The FSRA has already published a separate guidance for ICOs in October last year.
What do you think of Abu Dhabi Global Market’s crypto regulatory framework? Let us know in the comments section below.
Images courtesy of Shutterstock and ADGM.
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Original Article can be found here: https://news.bitcoin.com/abu-dhabi-global-market-regulatory-framework-crypto-activities/