SCA seeks feedback from across the industry on crypto asset rules
The UAE’s Securities and Commodities Authority is seeking industry and stakeholder feedback on the regulation of cryptocurrencies in the country, a move expected to further develop digital currency markets in the Arab world’s second-biggest economy.
The UAE market regulator said it recently posted draft regulations concerning crypto assets on its website to receive feedback from investors, brokers, financial analysts, researchers, media personnel and other relevant parties to help it finalise the wording of the new guidelines.
“Crypto asset regulations lay down standards and requirements for a wide range of market participants like issuers of securities, investors, custodians, crypto trading platforms, brokers and promoters engaged in [the] crypto asset industry,” the SCA said in yesterday.
The regulations will encompass all aspects of the crypto asset industry in the UAE ranging from token issuance requirements to trading and safekeeping practices with an emphasis on protecting investor interests. They will also include financial crime prevention measures, information security controls and technology governance norms.
The SCA said it will take any feedback into consideration “when working on the final wording of the regulations”, as the rules are currently in draft form. Once the regulations are implemented, the SCA said it will be possible for market participants to request guidance on specific token issuance and regulatory requirements as part of an e-services system rolled out by the authority.
In February last year, the SCA issued a warning to investors against any fundraising in cryptocurrencies, whether through initial coin offerings, token presale or crowd sales.
The Central Bank of the UAE also warned against trading in cryptocurrencies, citing a risk of money laundering or terrorism funding as they do not go through official channels and cannot be effectively monitored.
In September, the Financial Services Regulatory Authority of the Abu Dhabi Global Mark-issued a set of guidelines for digital securities to support the development of crypto assets within the financial centre.
These provide a clarity on ADGM’s regime following recent technological advances, focusing on initial offerings, listing, trading and custody of digital securities. The regulations also provide a “road map for entities to efficiently and smoothly migrate into conducting digital securities activities” within the centre, according to a statement from ADGM at the time.
The central banks of the UAE and Saudi Arabia are also working on a pilot project to launch a shared digital currency for cross-border bank transactions using blockchain technology.
Crypto asset regulations lay down standards and requirements for a wide range of market participants SCA