Abu Dhabi Global Market (ADGM) published a press release regarding the regulation of cryptocurrency exchanges on its website yesterday.
The Financial Services Regulatory Authority (FSRA) plans to help the crypto community in the UAE by creating a “a robust, risk-appropriate regulatory framework to regulate and supervise activities of virtual currency exchanges and intermediaries.” No date or roadmap was specified for the upcoming project, however, the release mentioned that FSRA will be getting help from “industry participants and relevant professional bodies”.
The FSRA previously submitted a ‘guidance’ on supervising ICOs and cryptocurrencies in October of last year. According to the document, cryptocurrencies are commodities which are regulated under Financial Services and Market Regulations (FSMR) only as derivatives. Mining, spot trading and spot transactions are unregulated. Tokens issued in ICOs are considered as securities, and the entire ICO is regulated by FSMR.
The announcement comes a few days after Securities and Authorities Commodity announced that ICO investors are on their own as the UAE doesn’t “recognize, regulate or supervise” ICOs.
The FSRA elaborated on the topic, “The FSRA notes that virtual currencies, although not legal tender, are gaining interests globally as a medium of exchange for goods and services. However, there are risks and concerns. Given the anonymous and cross-border nature of virtual currency transactions, they are particularly vulnerable to money laundering and terrorist financing risks, as well as other financial crimes.”
Furthermore, cyber crimes and hacks on cryptocurrencies have also raised concerns among governments and crypto users alike. Under these circumstances, a flexible regulatory framework will provide safety and security for cryptocurrency holders.
While Abu Dhabi deals with the upcoming framework, crypto users are urged to inform the FSRA about their recent ICO investments and cryptocurrency dealings to “discuss appropriate treatment within the regulatory regime.”
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