Abu Dhabi regulator introduces its ‘guiding principles’ for crypto

Abu Dhabi Global Market Free Economic Zone (ADGM) financial regulator, the Financial Services Regulatory Authority (FSRA), has published its “Guiding Principles”, which outline its approach to digital asset regulation.

The principles are friendly to the crypto industry and pledge to adhere to international standards in Anti-Money Laundering, Combating the Financing of Terrorism (CFT), and financial sanctions.

Five principles were published on the ADGM’s official website without a date. They are called Internationally Recognised Regulatory framework, Dynamic and Market-Oriented Regulators, Risk-focused Approach, Proportionate Approach and Cooperation, and Delivering High Standards Quality & Service.

Although the general tone and content of these principles are consistent with standard declarations that make the market more dynamic and innovative, safe and secure, there are specific points that would help to define the ADGM regulatory landscape.

The principles state that the ADGM’s legislative structure will be based upon English Common Law. The economic zone will have a Regulator, Registrer, and Court function that are completely independent. A regulatory committee was appointed by the board to supervise independence.

These premises sound liberal, but they will be complemented by international AML/CFT standards compliance, close cooperation and “financial Sector Surveillance” as part of the FSRA function.

Related: Swiss and Dubai Crypto Associations Team Up

Market participants will also be involved in the regulator’s “regular, but informal” collaboration. This collaboration will include one-on-1 sessions between the regulatory and business teams as well as working groups of professionals and market participants.

ADGM published a consult paper in March 2022 proposing that licensed entities will be permitted to facilitate NFT trading in the jurisdiction. Binance and Kraken were the first foreign firms to be granted regulatory approval to operate in ADGM in April.