Important Cryptocurrency Regulations Proposed by Abu Dhabi Regulator
On Monday the financial regulator of Abu Dhabi Global Market (ADGM), the Financial Services Regulatory Authority (FSRA) has published a regulatory consultation paper addressed to cryptocurrencies. The observer declares that the offered regulation will consider the new risks that are posed by the crypto trading.
Cryptocurrency Regulations Offered By Abu Dhabi Regulator
The FSRA has the right to regulate the ‘Spot Crypto Asset Framework.’ In addition, the offered regulation is aimed at resolving a number of issues that arose due to the growth of the cryptocurrency industry. In its advisory document, FCRA states that the new regulation will also try to unravel the cryptocurrencies from the actual regulation which is designed for traditional financial markets.
The regulator further defined a number of risks which should be solved in the cryptocurrency industry. The FSRA also argues that regulation is necessary to resist money laundering and terrorist financing in the crypto currency market.
Besides, the regulator mentions that there is an obvious need for intensified client protection and managemen of new technologies. These include crypto-wallets, private keys and risk management systems.
In the event the regulation is instituted, it will influence some of the aspects of the cryptocurrency industry. Essentially, private individuals trading cryptos as agents, or advisors will see their activities regulated.
Crypto Exchanges will suffer the most
Following this, crypto exchanges are most likely to be affected most. According to the proposed provision, the crypto-exchange exchanges will have to pay $ 125,000 authorization fee and supervisory fee of $ 60,000. In addition, they will be required to pay a monthly trading fee of 0.0015% of the daily value of the trade.
The UAE is more supportive of the cryptocurrency industry compared with 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.