In order to make the marketplace for cryptocurrency firms secure, the Financial Services Regulatory Authority (FSRA) of the Abu Dhabi Global Market (ADGM) - the country capital’s international financial center and free zone - has instituted its ‘crypto asset regulatory framework’ for firms working in the zone. As declared in the ADGM statement, the start follows a public consultation, with local and global respondents that were finished by ‘several refinements’ of the framework before its release.
The FSRA has addressed issues around consumer protection, safe custody, technology governance, disclosure/transparency, Market Abuse and the regulation of Crypto Asset Exchanges in a manner similar to the regulatory approach taken in relation to securities exchanges globally.
Excerpt from the Regulations
In the whole, the FSRA has ranked cryptocurrencies, or “crypto assets” as commodities. Security tokens published will be subject to relevant regulatory requirements while ‘utility tokens’ will also be estimated as commodities. Any off-shoot funds, derivatives or tokens will be regulated as ‘Specified Investments’ under the Financial Services and Markets Regulations.
We are encouraged by the significant global and regional interest from exchanges, custodians, intermediaries and other institutions to our crypto spot regulatory framework. Globally, responsible crypto asset players are seeking a regulatory regime upholding high standards that foster market confidence…Our 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.
FSRA of ADGM Chief
In accordance to the new regulations, operators looking to institute a new exchange will be demanded to pay an initial authorization fee of $125,000 and an annual fee of $60,000. Crypto custodians like wallet companies will have to cough up $20,000 initially and $15,000 per year.