Wednesday, May 27, 2020

Abu Dhabi Adjusts Its Crypto Regulations To Support FATF Standards, Offering More Clarity to Crypto Firms

Abu Dhabi financial regulator adjusts its crypto regulations to support FATF standards, according to a recent report. These regulations support the Financial Action Task Force (FATF) standards and also that of the Financial Services Regulator Authority (FSRA). As such, crypto companies in the region have clearer rules to guide their operations.

Abu Dhabi Financial Regulator Adjusts its Crypto Regulations To Support FATF Standards

Abu Dhabi Global Market (ADGM) has made an amendment to its cryptocurrency regulations. And the adjustment made is to meet the FSRA’s and FATF’s standards. Updates made is to improve its regulatory framework and align with global regulations guiding the crypto space.

Reportedly, one of the major updates to this regulation is a change in its language. In this case, the term “crypto-assets” changes to “virtual assets”. Also, this change is in line with the FATF’s description of this asset class. In line with that, the FRSA’s guidance is more comprehensive and consists of specific details.

Crypto Companies in Abu Dhabi Have More Clarity on Regulations

As a consequence, cryptocurrency companies in Abu Dhabi have more to work with and can be duly guided. A more precise legal framework also makes it easier to adhere to the financial regulator’s requirements. In the past, uncertainty in regulations is one of the major setbacks for crypto firms as noted.

On the other hand, the update to these regulations is in line with United Arab Emirates’ attempt to properly regulate the cryptocurrency space. The Middle East nation has, reportedly, proposed that Initial Coin Offerings (ICO) be classified as a form of security.

Accordingly, companies looking to offer ICOs must first seek from the financial regulator if their ICO falls under the security class. And if it does, registration of ICO follows. Much more, the regulator could potentially control what companies can do with their tokens.

UAE Drafts Regulation to Guide the Use of Crypto

In October 2019, the Securities and Commodities Authority (SCA) in UAE drafted a regulation that will guide the use of cryptocurrencies in the country. And like its recent move, it sought to offer crypto-related projects greater clarity.

That aside, G20 in its recent meeting admonished its member countries to adopt the regulatory standards set by the FATF. According to the international forum, the risks associated with virtual assets and stable coins need to be analyzed, before cryptocurrency projects can commence.

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