ADGM seeks to regulate crypto assets

Regulatory authorities in Abu Dhabi have proposed a legislative framework to bring more order to crypto asset activity in the region and to attract institutional investors.

The consultation paper was issued by the Financial Services Regulatory Authority (FSRA), the regulator of Abu Dhabi Global Market (ADGM). The text proposes new rules to define crypto asset exchanges as market infrastructures and address risks concerning anti-money-laundering and counter-terrorist financing requirements, consumer protection, technology governance and safe custody.

The ADGM is not alone in wanting more consistent regulation of crypto assets, which include digital currencies such as Bitcoin. The International Monetary Fund and the Financial Stability Board, among others, have called for such measures but no formal rules have been agreed – a situation that creates the possibility of confusion for potential investors.

The ADGM’s paper states that a fair, credible and effective regime will enable participation not only from retail and accredited investors but also from institutions and corporates that have largely been absent from crypto markets.

“By providing a best-in-class regime, this addresses concerns of regulators and investors alike, particularly institutional investors seeking to gain exposure to this asset class,” said FSRA chief executive Richard Teng.

©2018 funds global mena

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