The Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) has announced the immediate implementation of amendments to its regulatory framework for digital assets.

These amendments follow extensive industry engagement and feedback received on Consultation Paper No. 11 of 2024.

The key focus of the changes lies in refining the process through which Virtual Assets (VAs) are approved for use as Accepted Virtual Assets (AVAs) within ADGM.

The amendments also introduce revised capital requirements and fee structures for Authorised Persons undertaking Regulated Activities involving VAs (VA Firms).

Additionally, a new product intervention power specific to VAs has been introduced, alongside formalised rules reinforcing the prohibition on the use of privacy tokens and algorithmic stablecoins within ADGM.

The regulatory enhancements also broaden the range of investments permitted for Venture Capital Funds, allowing them greater flexibility in engaging with the digital asset ecosystem.

To support VA Firms in navigating the new regime, the FSRA has updated its Guidance, Regulation of Virtual Asset Activities in ADGM, reflecting the changes and offering further clarity on the AVA assessment criteria.

Emmanuel Givanakis, Chief Executive Officer of ADGM’s FSRA, stated:

“The implementation of these changes marks a significant milestone in the evolution of the FSRA’s framework for digital asset regulation. Through extensive consultation with industry stakeholders, we have further enhanced our framework to provide the regulatory certainty that industry participants need, while addressing the evolving risks of the digital asset ecosystem.”

Featured image credit: ADGM