The Abu Dhabi Global Market (ADGM) Financial Services Regulatory Authority (FSRA) has newly forthput a legislative framework that includes new rules governing cryptocurrency exchanges, custodians plus other intermediaries. The regulatory consultation paper on cryptocurrencies was published on Monday 30th April. The UAE-based financial institution claims its proposed regulation that was termed as 'Spot Crypto Asset Framework," that will make it possible to address the new risks posed by cryptocurrency trading.
Richard Teng, ADGM Chief Executive Officer said:
"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."
The proposed framework ekes out the former guidance on Initial Coin Offerings (ICOs) that are now handled as securities under ADGM rules. Crypto assets will be subject to the current regulatory framework even though they will continue to be treated as major commodities from a regulatory policy perspective.
Crypto asset exchanges will most probably be heavily affected by the new set rules. According to the proposed regulation, the exchanges will have to pay FRSA a $125,000 as authorisation fee and a $60,000 as supervision fee. In addition, they will be subjected to pay a monthly trading levy tax equivalent to 0.0015% of daily trading value.
UAE has tirelessly supported the operations of cryptocurrency industry, unlike most governments, for example in 2016, UAE-based financial institution - Abu Dhabi Exchange launched a blockchain-based voting system
The deadline for submitting all the necessary feedback from ADGM's market participants about the arising proposals is 28 May this year.
Traders and Exchanges dealing in cryptocurrency feel disturbed, bothered and unsettled by the financial costs imposed on them but FRSA's new regulation will work as a welcome seal of approval. A Lot of allegations of criminality and market bubbles have continuously discolored the crypto industry, but governmental regulation gives a certain level of institutional approval that almost everyone in the industry is hunting for in particular.