Financial Services Regulatory Authority (FSRA) in Abu Dhabi published a document today. A bill to regulate the trade in cryptocurrencies. This has been already been announced in mid of February.
This announcement of the FSRA is released through the Abu Dhabi Global Market (ADGM). This ensures that this legal framework seeks to protect investors. And prevent the use of cryptocurrency to commit financial crimes. Mainly such as money laundering or financing terrorism.
The FSRA explains, that cryptocurrency was created to decentralize the financial sector. The rapid growth of this crypto assets has transformed their ecosystem into market shares. Seeing the growth Investors seek to obtain gains derived from the increase in their value.
Richard Teng, executive director of the institution said:
As the recognised top MENA Fintech Hub and the Fintech Regulator of the Year 2018 for the Middle East region, the FSRA is seeking to instil proper governance, oversight and transparency over crypto asset activities. In our outreach and engagement, many established and responsible participants engaged in crypto asset activities are seeking to be properly regulated by observing high standards on customer protection, custody and technology governance.
ADGM proposes its regulatory framework
The position of Abu Dhabi on the FinTech sector and the cryptocurrencies are very open. ADGM proposes its regulatory framework. Which seeks to make this market safer without prohibiting or restricting its operation.
This bill focuses on the development of Know Your Customer policies. This will avoid the criminal use and transparency of transactions. It also specifies that money can be lost if any cryptocurrency platforms are hacked. The cases of Coincheck or BitGrail this year or the famous Mt Gox theft. As they all had affected the market.
On transparency, this is likely to affect the trade of privacy-oriented cryptocurrencies. In mid-March, when Coincheck resumed its services, it did not allow the trade of Monero, Zcash, and Dash. as they do not allow to trace the origin or destination of the coins.
The FSRA invites the citizens of this region to comment on their proposal on May 28. So all these points will be debated before declaring the legal framework.
Let us know in the comment below what do you think about FRSA’s regulation proposal?