The Financial Services Regulatory Authority (FSRA), the financial regulator of the Abu Dhabi Global Market (ADGM) free economic zone, published its “Guiding Principles” on its approach to the regulation and supervision of digital assets.
In a friendly tone with the cryptocurrency industry, the principles commit to comply with international standards in the fight against money laundering (AML), the fight against the financing of terrorism (CFT) and the support of financial sanctions. .
The five principles were published without specifying the date on the official website of the ADGM. They are entitled “Internationally recognized regulatory framework”, “Dynamic and market-oriented regulation”, “Risk-centric and proportionate approach”, “Cooperation and shared responsibility” and “Providing a high quality service”.
Although, in general, the tone and content of the principles correspond to the standard declarations of making the market more dynamic, innovative and safe, at the same time, there are some specific points that would define the normative panorama of the ADGM.
In accordance with the principles, the legislative framework of the ADGM will be based on English common law. Within the economic zone, the functions of Regulator, Registrar and Court will operate fully independently, with a regulatory committee appointed by the council to ensure independence of supervision.
As liberal as they may seem, these premises will be complemented by compliance with international AML/CFT standards, close cooperation with other jurisdictions, and “financial sector surveillance” as part of the role of the FSRA.
The regulator also intends to work closely with market participants on a “regular but informal” basis. This will include breakout sessions between the regulatory and business teams, as well as working groups of market participants and practitioners.
In March 2022, the ADGM published a consultation document proposing that licensed companies be allowed to facilitate non-fungible token (NFT) trading in the jurisdiction. In April, Binance and Kraken became the first foreign companies to receive regulatory approval to operate in ADGMs.
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