Published: 2018-11-28 22:27:13
Abu Dhabi Securities Exchange (ADX) has issued a ‘thought paper’ that primarily focuses on cryptocurrency and blockchain infrastructure and how to accommodate traditional transactions with crypto assets.
Meanwhile, the exchange explained that due to the characteristics of the virtual asset class, the new FMIs initiative will support financial institutions as they try to identify the technical and operational criteria required to issue crypto- assets.
Join the Leading Industry Event!
The UAE has already taken steps to regulate the way that blockchain start-ups are raising money – initial coin offerings– though the nation’s regulators continue to warn of the many risks involved. The watchdog is proposing a fit-for-purpose regulatory framework that effectively recognizes digital tokens as securities.
Swiss Precision in Trading TechnologyGo to article >>
Specifically, the UAE’s Securities and Commodities Authority (SCA) approved a plan setting out its proposed framework to regulate crypto asset activities, including ICOs, exchanges and other intermediaries.
New rules to regulate ICOs
The new regulations, which come into effect shortly, also address the full range of the issuance cycle associated with crypto fundraising. For ICO operators, the framework will entail proper regulation that cover key risks including anti-money-laundering and counter-terrorist financing, consumer protection, technology governance and safe custody.
Under the guidelines, startups wishing to execute an ICO must approach the SCA to see if it falls under the body’s regulation. Also, market intermediaries and secondary market operators dealing with ICOs must be approved by the regulator.
Most likely, ICO operators will have to publish a prospectus, just like a firm would for an IPO on the stock market. And if an ICO has the characteristics of a security, such as giving a person ownership of shares in a company, then the SCA will regulate it.
Commenting on the news, CEO of ADX Rashed Al Blooshi said: “ADX continues its efforts to manage the transition from conventional assets to more encrypted assets, which are witnessing major and rapid development in the region.”
The views and opinions expressed in the article UAE Bourses Dig Deeper into Crypto, ADX Explores Blockchain Infrastructure do not reflect that of 48coins.com nor of its originally published source. Article does not constitute financial advice. Proceed with caution and always do your own research.