Rules in offing for spot crypto asset markets

dubai — Abu Dhabi’s markets regulator said it is seeking to introduce proper governance, oversight and transparency over crypto asset activities.

On Monday, the Financial Services Regulatory Authority (FSRA), the regulatory authority of Abu Dhabi Global Market (ADGM), published a consultation paper setting out its proposed framework to regulate spot crypto asset activities, including exchanges, custodians and other intermediaries.

The proposal is to have a fit-forpurpose regulatory framework that effectively addresses the full range of risks associated with crypto asset activities.

In a statement, the FSRA said for crypto asset exchanges, it would entail proper regulation as market infrastructures addressing key risks including anti-money-laundering and counter-terrorist financing, consumer protection, technology governance and safe custody.

Richard Teng, chief executive officer, FSRA of ADGM, said many established and responsible participants engaged in crypto asset activities are seeking to be properly regulated by observing high standards on customer protection, custody and technology governance.

“By providing a best-in-class regime, this addresses concerns of

Our proposed regulatory regime is only possible with our deep understanding and knowledge of the solutions available to address the respective risks Richard Teng, Chief executive officer, FSRA of ADGM

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,” said Teng.

The statement said the dramatic growth of digital asset and crypto asset markets has been transformational for financial markets. Initially intended as a medium of exchange requiring no central counterparty, crypto assets such as Bitcoin have evolved to become alternative investments for investors seeking returns in this asset class.

In the majority of jurisdictions, crypto asset activities are largely unregulated, or regulated primarily from the AML and CTF angle. However, crypto asset market activities involve other significant risks for participants.