ADGM’s financial regulator publishes guiding principles on virtual asset regulation

The principles state the FSRA’s risk appetite and priorities for the sector, with each principle covering one of the key pillars of ADGM’s holistic approach



The principles stand as a reflection of the experience and expertise the ADGM’s FSRA has gathered since the introduction of the world’s first bespoke regulatory regime for virtual assets in 2018. — File photo
The principles stand as a reflection of the experience and expertise the ADGM’s FSRA has gathered since the introduction of the world’s first bespoke regulatory regime for virtual assets in 2018. — File photo

By Wam

Published: Mon 12 Sep 2022, 5:28 PM

Abu Dhabi Global Market (ADGM), the International Financial Centre of the UAE’s capital city, announced today that its financial regulator, the Financial Services Regulatory Authority (FSRA), has published Guiding Principles on its approach to virtual asset regulation and supervision as a way to outline its expectations for the asset class and service providers in the sector.

The principles state the FSRA’s risk appetite and priorities for the sector, with each principle covering one of the key pillars of ADGM’s holistic approach, namely: a robust and transparent regulatory framework; high standards of authorisation; preventing money laundering and other financial crimes; risk-sensitive supervision; enforcement powers for regulatory breaches; and its commitment to international cooperation. They will therefore be of particular relevance to potential applicants to ADGM and other regulators with an interest in this area.

The principles stand as a reflection of the experience and expertise the ADGM’s FSRA has gathered since the introduction of the world’s first bespoke regulatory regime for virtual assets in 2018. When viewed together, the principles are calibrated to ensure customer protection, risk sensitivity, market integrity, financial stability, and confidence in the ecosystem.

Emmanuel Givanakis, CEO of the FSRA, said these guiding principles will provide greater clarity to investors, other regulators, industry and the wider public of our approach to regulation in this area and key expectations we have set on current virtual asset service providers in ADGM and potential applicants.

"They also outline the tools we have at our disposal to mitigate the material risks that are born from these activities and the regulatory powers to identify and act upon any misconduct. Consistent with the FSRA’s broader strategy to align with international best practices, these principles make clear the high standards of our framework at a time of increased volatility and regulatory focus.”

ADGM is committed to engaging with the industry to support its continuous transformation and innovation. — Wam


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