The Abu Dhabi Global Market (ADGM)’s Financial Services Regulatory Authority (FSRA) has recently proposed a legislative framework to bring order to the crypto asset markets in the region, including new rules governing exchanges, custodians and other intermediaries.
The FSRA’s proposed regulation will attempt to address a range of issues that it claims have arisen solely over the past ten years with the growth of the cryptocurrency industry.
According FSRA, the proposed regulation will also aim to untangle cryptocurrencies from current regulation that was designed with traditional financial instruments in mind.
The regulation also seeks to address the issue by defining crypto asset exchanges as market infrastructures and proposing a raft of new measures to cover key risks including anti-money laundering and counter-terrorist financing, consumer protection, technology governance and safe custody.
The body says that a fair, credible and effective regime will enable participation not only from retail and accredited investors that are active in seeking exposure, but “facilitate participation from institutions and corporates that have been largely absent due to inability to address the risks involved”.
Richard Teng, Chief Executive Officer, FSRA of ADGM, said, “As the recognised top MENA Fintech Hub and the Fintech Regulator of the Year 2018[3] for the Middle East region, the FSRA is seeking to instil proper governance, oversight and transparency over crypto asset activities. In our outreach and engagement, many established and responsible participants engaged in crypto asset activities are seeking to be properly regulated by observing high standards on customer protection, custody and technology governance.
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. Our proposed regulatory regime is only possible with our deep understanding and knowledge of the solutions available to address the respective risks and represents the most comprehensive regime proposed by global regulators so far.”
ADGM is seeking feedback from market participants on the proposals, with a deadline of 28 May for all submissions.
