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Abu Dhabi regulator unveils its ‘guiding principles’ for cryptocurrencies

by SuperiorInvest

The Financial Services Regulatory Authority (FSRA), the financial regulator in the Abu Dhabi Global Market free economic zone (ADGM), has published its “Guiding Principles” on its approach to the regulation and supervision of digital assets.

The Principles are crypto-industry friendly and commit to international standards in anti-money laundering (AML), countering the financing of terrorism (CFT) and supporting financial sanctions.

There were five principles published without specifying the date on the official ADGM website. They fall under the names Internationally recognized regulatory framework, Dynamic and market-oriented regulations, Risk-oriented and proportional approach, Cooperation and shared responsibility, Provision of high standards of quality and services.

Although in general the tone and content of the policy corresponds to the standard statements that the market is more dynamic, innovative and safer, at the same time there are some specific points that would define the regulatory environment of ADGM.

According to the principles, ADGM’s legislative framework will be based on English common law. Within the economic zone, the regulator, registrar and court functions will operate completely independently, with a regulatory committee appointed by the board to ensure independence of oversight.

As liberal as they sound, these spaces will be complemented by compliance with international AML/CFT standards, close cooperation with other jurisdictions and “financial sector supervision” within the FSRA function.

Related: The Swiss and Dubai crypto associations have merged

The regulator also intends to work closely with market participants on a “regular but informal” basis. This will include one-to-one meetings between the regulatory and commercial teams, as well as working groups of market participants and experts.

In March 2022, ADGM published a consultation paper proposing that licensed companies will be able to facilitate trading in non-fungible tokens (NFTs) in the jurisdiction. In April, Binance and Kraken became the first foreign company obtain regulatory approval to operate in ADGM.

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