Abu Dhabi Global Market’s FSRA (Financial Services Regulatory Authority) launched their new regulatory framework for cryptocurrencies on June 25th and, according to reports, the new guidelines will cover the crypto industry including intermediaries and exchanges.
Abu Dhabi Global Market (ADGM) created the regulatory framework for cryptocurrencies, Spot Crypto Asset Framework, which is in compliance with the act from 2015 called Financial Services and Markets Regulations Act.
According to the framework itself, its goal is to address various issues regarding cryptos, including the risks that come with trading crypto assets. It will also lay out security measures to help traders with asset recovery in case of theft, or other kinds of asset loss.
The framework will cover a wide list of crypto-related activities, including exchanges, custodians, as well as intermediaries that are coming in contact with crypto assets. Of course, illegal activities like money laundering and other crimes related to misuse of finances will also be covered by the regulatory framework.
Abu Dhabi has come up with solutions for tokens considered to be securities, and are being regulated accordingly. The new regulation will see crypto assets as commodities and utility tokens.
ADGM’s CEO, Richard Teng, stated that there are many crypto asset players around the world looking for a capable regulatory framework to uphold higher standards. With the usual uncertainties regarding market behavior, the proper conditions are often difficult to find. This is why the FSRA has put some serious effort into creating this framework, and why it will become one of the leaders when it comes to creating a capable governance, transparency, and oversight of crypto activity.
ADGM had assistance for the framework’s creation
The guidelines were created in consultation with the wider community, their press release states that the public’s feedback was positive and that the framework’s nature is appreciated both locally and globally. In fact, other regulators from around the globe significantly contributed to the value of these regulations, and have given positive feedback upon its completion.
ADGM added a number of amendments, as suggested by those who responded with suggestions and ideas on how to solve various issues. One such change includes the implementation of a trading tax that was previously created to be imposed on exchanges.
Despite the fact that cryptos were technically ‘forbidden’ by Sharia law, more and more investors, companies, and communities of the Arab world are starting to develop an interest in this trend. New concepts and solutions offered by crypto and block chain technology are being developed in this part of the world, showing a move towards adoption, albeit more slowly than in other parts of the globe.