The Financial Services Authority (FSRA) of Abu Dhabi Global Market (ADGM) has announced the immediate implementation of amendments to its regulatory framework for digital assets. This decision follows extensive industry engagement and feedback on Consultation Paper No. 11 of 2024.

The key focus of the amendments is on revising the process for accepting Virtual Assets (VAs) as Accepted Virtual Assets (AVAs) within ADGM. These changes also establish appropriate capital requirements and fees for Authorised Persons, referred to as VA Firms, conducting Regulated Activities related to VAs.

Additionally, the amendments introduce a specific product intervention power regarding VAs and confirm the existing prohibition of privacy tokens and algorithmic stablecoins within ADGM. Furthermore, the scope of investments that Venture Capital Funds may pursue has been expanded.

The FSRA has updated its Guidance on the Regulation of Virtual Asset Activities in ADGM to reflect these amendments and to provide further guidance to VA Firms on applying the AVA assessment criteria. Emmanuel Givanakis, Chief Executive Officer of ADGM’s FSRA, stated that the changes represent a significant milestone in the evolution of the framework for digital asset regulation.

He emphasized that through extensive consultation with industry stakeholders, the framework has been enhanced to provide the regulatory certainty needed by industry participants while addressing the evolving risks in the digital asset ecosystem. Givanakis expressed confidence that these amendments position ADGM as a premier jurisdiction for digital asset-related activities and demonstrate a commitment to fostering responsible innovation in financial services.

The FSRA also acknowledged the constructive feedback received on the Consultation Paper, which contributed to the successful outcome of the amended legislation.