ADGM Virtual Assets
Operating a Virtual Asset Business in the ADGM
For those operating in the virtual asset space, the Abu Dhabi Global Market (“ADGM”) has proved to be an attractive option. The pace of virtual asset development and growth is causing regulators around the world to ask themselves what they should do with this new form of “asset”. The ADGM’s regulator, the Financial Services Regulatory Authority (“FSRA”) took the initiative by setting out its regulatory stance in 2019. Their innovative virtual assets framework meets both the demand from this developing industry as well as the need for consumer protection.
What does a virtual assets licence cover?
The regulations have been designed around the virtual asset framework, with the virtual asset being treated as a “commodity” and therefore, not deemed to be a “Specified Investment” under the FSRA’s Financial Services and Market Regulations. Market intermediaries dealing in or managing virtual assets for example, broker dealers, custodians, asset managers, and virtual asset trading platforms (Multilateral Trading Facilities (“MTF”)) will need to be licensed/approved by the FSRA and only activities in accepted virtual assets are permitted. If the applicant firm wishes to undertake business related to both virtual assets and other financial services, it will need to apply for those services in addition to the virtual asset licence.
Discussions with the FSRA should begin at an early stage if you are considering making an application. You should also be prepared that the application process will require time, documentation and explanation until all concerned are comfortable that the business can “go live”.
Virtual Assets in the ADGM
Download our ADGM Virtual Asset Regulatory Insight article for details of:
- The FSRA Virtual Asset Framework
- The application process
- Specific requirements for Multilateral Trading Facilities(“MTF”) and virtual asset custodians
- ADGM and FSRA Licence Fees.