ADGM’s FSRA brings out guiding principles on approaching Virtual Asset Regulation and Supervision

Realizing the transformative power of the virtual asset (VA) industry and its potential to enable access to innovative financial services, ADGM’s FSRA outlines its expectations and risk appetite to regulate virtual asset service providers.

Abu Dhabi Global Market (ADGM), known as the International Financial Centre of the UAE’s capital city, has declared today that the Financial Services Regulatory Authority (FSRA), its financial regulator, has published some guiding principles on its method of virtual asset regulation and supervision as a way of outlining its expectations for the asset class and service providers within the sector.

The principles serve as an accessible and easy-to-follow supplement to ADGM’s extensive regulatory framework for spot virtual asset activities. They also seek to facilitate greater regulatory cooperation and coordination between the FSRA and other authorities, both in the UAE and globally. Moreover, the guiding principles can also notify and educate the investor community and the general public about the regulatory actions that the FSRA can take to identify and react to underlying risks.

The principles specifically cover one of the key pillars of ADGM’s overall approach, with each principle specifying FSRA’s risk appetite and priorities for the sector, namely: a strong and transparent regulatory framework; high standards of approval; prevention of money laundering, and other finance related crimes; risk-sensitive supervision; enforcement of powers for regulatory violations; and its commitment to global cooperation. Thus they will be of particular relevance to potential applicants to the ADGM and other regulators who have an interest in this field.

The principles reflect the experience and expertise that the ADGM’s FSRA has gathered since introducing the world’s first bespoke regulatory regime for virtual assets in 2018. When taken together, the policies are calibrated to ensure consumer protection, risk sensitivity, market integrity, financial resilience, and trust in the ecosystem. All of these establish ADGM’s dynamic virtual asset community as a preferred destination for best-in-class virtual asset corporations and investors.

In light of recent market developments and diversity of vision for the future of the sector, ADGM is committed to supporting the industry’s continuous transformation and innovation. The main focus is on maintaining a dynamic yet strong regulatory framework and approach that can react to shifts in the sector’s risk profile. Acknowledging the cross-border nature of the asset class, the FSRA believes that the ongoing partnership between regulators is crucial for preventing harmful regulatory arbitrage.

Emmanuel Givanakis, CEO of the FSRA has said that these guiding principles will provide investors, other regulators, the industry, and the wider public with greater clarity about their approach to regulating this area and what expectations ADGM and potential applicants have set on current virtual asset service providers. According to him, these guiding principles also outline the tools they have at their disposal to mitigate the material risks arising from these activities and the regulatory powers to determine and act upon any transgression. He also said that being consistent with the FSRA’s overall strategy of aligning with international best practices, these principles articulate the high standards of their framework at a time of increased volatility and regulatory focus.

Source- Unlock bc

Leave a Reply

Your email address will not be published.