On June 25, 2018, the Financial Services Regulatory Authority (FSRA) of the international financial center in Abu Dhabi, Abu Dhabi Global Market, set out new guidelines to regulate crypto assets. The guidelines cover exchanges, intermediaries, and all others who participate in the crypto space.
Crypto Assets are Commodities, not Securities
The collective regulatory framework to administer crypto activities in the Abu Dhabi Global Market (ADGM) is dubbed the Spot Crypto Asset Framework. The ADGM said the ‘guidance’ is issued in compliance with the Financial Services and Markets Regulations Act 2015 (FSMR). The guidance framework states the intention of addressing “…the key risks that spot trading of Crypto Assets poses,” along with the lack of a “…safety net that enables users to recover their Crypto Assets in case of loss or theft.”
As such, the directive details regulation for multiple crypto-based activities. Such activities include “…Crypto Asset Exchanges, Crypto Asset Custodians and, as applicable, intermediaries engaged in Crypto Asset activities.” The Spot Crypto Asset Framework also covers all associated risks such as money laundering and financial crimes.
It should be noted that unlike in some other parts of the world, security tokens in Abu Dhabi, are the only crypto assets that are considered as securities and regulated accordingly. Per the new regulation, crypto assets and utility tokens are considered to be commodities.
Richard Teng, CEO of the FSRA of ADGM, said:
“Globally, responsible crypto asset players are seeking a regulatory regime upholding high standards that foster market confidence. 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.”
Local and Global Communities Happy with Crypto Regulation
The guidelines were drafted after consulting the public. According to a press release issued by the ADGM, feedback from the public has been extremely positive, and both local and global respondents appreciate the comprehensive nature of the proposed framework.
Feedback and input from regulators across the world indicated the value of the regulations to the crypto market. In Weng’s words, “…engagement with fellow global regulators also validated our position that the key risks highlighted have to be addressed for crypto assets to be more widely accepted and institutionalised.”
Based on the suggestions from the respondents, a number of amendments were made to the draft. One of the major changes incorporated was the implementation of the daily value trading tax that was initially imposed on crypto asset exchanges.
Although crypto has taken the world by storm, its emergence and discussion in the Arab world has certainly been muted. One reason for this is that cryptocurrencies are ‘forbidden’ by Sharia law. Nevertheless, the crypto tide is gaining the interest of many, especially in cities like Dubai, which are opening up to the concepts of blockchain as well as cryptocurrencies.
What is your take on the new crypto guidelines? Let us know your views in the comments section.
The post Abu Dhabi International Financial Center Implementing Guidelines for Crypto Space appeared first on BTCMANAGER.
Source: BTCManager.com
Original Post: Abu Dhabi International Financial Center Implementing Guidelines for Crypto Space
