The FSRA or Financial Services Regulatory Authority of Abu Dhabi is considering to regulate the exchange operations of cryptocurrency. The Abu Dhabi Global Market announced that it is “Reviewing and considering the development of a robust, risk-appropriate regulatory framework to regulate and supervise activities of virtual currency exchanges and intermediaries.” The action is an additional effort to its October 2017 move when it created a regulatory method to a token-based initial-coin-offering fund-raising activity. Cryptocurrency is currently gaining popularity in Abu Dhabi. The FSRA has declared that it would be implementing anti-money-laundering regulations to protect users. It will also place KYC or know-your-customer rules with regards to selling tokens. It will also be considering the proper classification of commodities and securities.
The FSRA has acknowledged the likelihood of cryptocurrencies to be utilized for financing terrorism as well as money laundering. It also notes that cyberattacks might make digital currencies vulnerable. Abu Dhabi is looking at countries such as the EU, Japan and Singapore in terms of its existing framework in supervising the exchange of cryptocurrencies. The FSRA has declared that it has plans to receive input from relevant professional entities or industry companies. The FSRA explicitly advises that exchanges and investors need to discuss with their respective agency with regards to the appropriate treatment for digital currency transactions even prior to the creation of a regulatory framework. The FSRA’s actions comes a mere week after the securities regulator of the United Arab Emirates gave an explicit warning to its residents with regards to the possible risks involved when placing investments on token-based fundraising efforts.
The date on when the regulations will be released are still not specified. The Abu Dhabi Global Market or ADGM has expressed its acknowledgement of digital currencies. It has also seen how it is currently gaining popularity globally. ADGM announced, “virtual currencies, although not legal tender, are gaining interests globally as a medium of exchange for goods and services.”