Abu Dhabi Global Market (ADGM), Abu Dhabi’s free-zone, published Monday a consultation paper titled “Proposals to enhance capital markets and virtual assets within ADGM.” It contains draft guidelines, which, among other asset types, include nonfungible token trading (NFT). According to the paper, companies that have obtained a license from the financial regulator of the free zone should be permitted to facilitate NFT trading.
The document includes sections on traditional financial instruments and a page about virtual assets. The Financial Services Regulatory Authority, which is the chief regulator for the free zone, describes NFTs and other financial instruments as intellectual property. It also proposes multilateral trading facilities (MTFs), and Virtual Asset Custodians(VAC) to manage NFT marketplaces.
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Additionally, the document mentions that transactions in NFTs could trigger the requirement for compliance with ADGM’s Anti-Money Laundering and Sanctions Rules.
As the document states, FSRA has not yet proposed a formal regulatory framework to NFTs. The consultation paper can be viewed until May 20th and invites stakeholders to comment on major questions such as “What types NFTs should be allowed to trade upon MTFs?” or “How do you integrate third-party NFT registryies?”
ADGM is one the three largest free economic zones in the United Arab Emirates that hosts virtual asset service providers (VASPs). It was also the first to have its regulatory framework back in 2018. It was however, another UAE free zone, the Dubai Multi Commodities Centre, that made headlines last week when it granted its newly legislated crypto license for FTX and Binance.