The Financial Services Authority (FSRA), the regulatory arm of Abu Dhabi Global Markets (ADGM), based in Abu Dhabi, is implementing amendments to its digital asset regulatory framework. Following the press release, the fixes will take effect immediately.
Implementation of these amendments follows the widespread industry engagement and feedback received in 2024 Cooperative Discussion Paper No. 11.
This fix corrects how virtual assets are accepted
This amendment introduces a revision on how virtual assets are accepted in ADGM. There will also be amendments to capital requirements and fees for accredited persons and companies who wish to carry out regulated activities in the virtual asset sector.
This amendment also introduces certain product intervention capabilities related to VAS. It also reiterates that ADGM does not allow the use of prohibited use of privacy tokens and algorithm stability within ADGM.
The revised regulations define virtual assets as either not guaranteed to be issued by the government
Or satisfy any jurisdiction of central banks and the above functions. This is only distinguished from Fiat currency and electronic money by agreement within the community of users of virtual assets. It is also not a designated investment, a Fiat reference token, or a spot item.
For example, a new definition of an accepted virtual asset is a virtual asset that meets the requirements set forth by rules made by the regulatory authorities pursuant to sections 5a(1)(b)(i).
This is slightly different from the previous definition read as “a recognized virtual asset that, in the opinion of the regulator, meets the requirements of certified persons carrying out regulated activities in relation to virtual assets.” ”
Banks can provide custody of virtual assets
Finally, this revision will expand the scope of investments venture capital funds invest in.
Emmanuel Givanakis, CEO of ADGM’s FSRA, noted that these changes are important in the evolution of the regulatory framework and are the result of extensive consultations with industry stakeholders.
He said: “We have further strengthened our efforts to provide the regulatory certainty that industry participants need while addressing the evolving risks of the digital asset ecosystem.
ADGM was one of the world’s first regulators to issue a virtual asset framework in 2018. The recently revised framework is the results of a consultation form submitted in December 2024.
ADGM’s Financial Services Regulatory Authority (FSRA) has issued 2024 Cooperative Discussion No. 11, establishing a proposed amendment to the regulatory framework for authorized persons carrying out regulatory activities, including virtual assets, at ADGM, and calling for feedback on potential changes to that framework.
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