Abu Dhabi Regulator proposes cryptocurrency regulations, which are aiming to address a range of issues that have emerged thanks to the growth of the cryptocurrency industry.
1 May, AtoZ Markets – The financial regulator of Abu Dhabi Global Market (ADGM), the Financial Services Regulatory Authority (FSRA) on Monday has issued a regulatory consultation paper aimed at cryptocurrencies. The watchdog claims that the proposed regulation will address the new risks that are posed by the crypto trading.
Abu Dhabi Regulator Proposes Cryptocurrency Regulations
The FSRA has entitled the regulation the ‘Spot Crypto Asset Framework.’ Moreover, the proposed regulation is aiming to address a range of issues that have emerged thanks to the growth of the cryptocurrency industry. In its consultation paper, the FSRA states that the new regulation will also attempt to untangle cryptocurrencies from current regulation that is intended for the traditional financial markets.
The regulator has further identified a number of risks that it states need to be resolved in the cryptocurrency industry. The FSRA also claims that the regulation is necessary for combating the money laundering and terrorist financing in the cryptocurrency market.
In addition, the regulator notes that there is a clear need for heightened consumer protection and governance of new technologies. These include crypto-wallets, private keys and risk management systems.
In case the regulation is established, it will affect some of the aspects of the cryptocurrency industry. In fact, individuals trading cryptos as agents, or advisors will see their activities regulated.
Crypto Exchanges will be affected the most
Following on this, cryptocurrency exchanges will most likely to be affected the most. Under the proposed regulation, cryptocurrency exchanges till have to pay the watchdog an authorization fee of $125 000 authorization fee and a $60 000 supervision fee. Moreover, they will be obliged to pay a monthly trading levy of 0.0015% of daily trading value.
The UAE appears to be more supportive of the cryptocurrency industry in comparison to other countries. The ADGM has expressed the support for the development of cryptocurrencies and initial coin offerings (ICOs) in 2017. The Abu Dhabi exchange has launched a Blockchain-based voting system back in 2016.
Think we missed something? Let us know in the comments section below.