Home News Abu Dhabi rolls out draft recommendations for NFT trading

Abu Dhabi rolls out draft recommendations for NFT trading

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On March 21, the emirate’s free zone, Abu Dhabi Global Market (ADGM), released a consultation document titled “Proposals for Enhancements to Capital Markets and Virtual Assets in ADGM”. The document offers proposed guidelines for nonfungible token (NFT) trading, among other asset types. The report suggests that enterprises possessing a financial regulator’s licence in the free zone have the authorization to support NFT trading.

The text comprises a little more than a page on virtual assets and NFTs. In addition to portions dedicated to traditional financial instruments. NFTs described as intellectual property rather than “defined investments or financial instruments” in this section by the free zone’s principal regulator, the Financial Services Regulatory Authority (FSRA). It also suggests allowing MTFs and VACs to run NFT marketplaces.

Transactions in NFTs may also be subject to the Anti-Money Laundering (AML) and Sanctions Rules of the ADGM, according to the paper.

FSRA does not propose a formal regulatory framework for NFTs at this time, as stated in the document. The consultation document is accessible for comments until May 20. And it invites stakeholders to weigh in on a number of key issues. Such as “What sorts of NFTs should acquire allowance to trade on MTFs?” “How should third-party NFT registrations be integrated?”

ADGM is the first of three major free economic zones in the United Arab Emirates. That house virtual asset service providers (VASPs). And it was the first to re-establish its regulatory framework in 2018. However, another free zone in the UAE, the Dubai Multi Commodities Centre (DMCC), made headlines last week. When it granted FTX and Binance exchanges its newly legislated crypto licence.

UAE reportedly plans to issue federal crypto license for VASPs

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