The Abu Dhabi Global Market (ADGM) Registration Authority has introduced comprehensive regulations governing Web3 organizations. The international financial free zone’s regulatory framework is “purpose-built” and the first of its kind, the agency claimed.
The Distributed Ledger Technology (DLT) Foundations Regulations will provide for the operation of blockchain foundations, Web3 entities, decentralized autonomous organizations (DAOs) and traditional foundations expanding into DLT. Blockchain foundations provide financial and other forms of support for a blockchain without direct involvement in it.
The regulations enable the creation of a “DLT Foundation” by submitting a signed charter that includes a description of the foundation’s initial assets and details about its governance and token issuance (if any), along with the organization’s white paper, tokenomics paper and a link to a technical document called a DLT Framework.
ADGM welcomes Al Reem Island businesses to its community#WamNews https://t.co/NoLasneinS
— WAM English (@WAMNEWS_ENG) November 1, 2023
A foundation will be required to disclose the names of its key figures, which will not be made public. It must also have a name that ends with “DLT Foundation.” It will be required to have a council of between two and 16 members for managerial and administrative purposes. A foundation will not be allowed to carry out activities licensable by the ADGM Financial Services Regulatory Authority. Its token holders will be treated as beneficiaries.
Related: Middle East regulatory clarity drives crypto industry growth — Binance FZE head
The regulations are dated Oct. 2 and were made public on Nov. 1. Initial registration application fees will total $50,000.
English law applies inside the ADGM, which opened in 2015. It introduced regulations on cryptocurrency in 2018. The new regulations are part of ADGM’s continuing strategy to raise its profile in the blockchain and digital assets sphere. ADGM chairman Ahmed Jasim Al Zaabi said in an emailed statement:
“By transforming the blockchain and Web3 landscape, we are moving towards a future characterised by setting global benchmarks with enhanced transparency and efficiency.”
In February, ADGM resident Hub71 created a $2 billion project called Hub71+ Digital Assets to encourage Web3 growth. First Abu Dhabi Bank was also involved in that initiative. Abu Dhabi and the ADGM are also home to numerous other crypto service providers and foundations.
Magazine: Crypto Valley and the Crypto Oasis: Ralf Glabischnig
