The Abu Dhabi Global Market (ADGM) Registration Authority has introduced comprehensive regulations governing Web3 organizations. The international financial free zone’s regulatory framework is now the first of its kind, according to the agency. The regulations, known as the Distributed Ledger Technology (DLT) Foundations Regulations, will provide guidelines 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.
These regulations allow for the creation of a “DLT Foundation.” To establish a foundation, interested parties must submit a signed charter outlining the foundation’s initial assets, governance structure, and details about token issuance, if applicable. The foundation must also provide supporting documents such as a white paper, tokenomics paper, and a technical document called a DLT Framework. The names of the foundation’s key figures will be recorded but not made public. Additionally, the foundation must have a name that ends with “DLT Foundation” and form a council of between two and 16 members for managerial and administrative purposes. It will not be permitted to engage in activities requiring licensure from the ADGM Financial Services Regulatory Authority, and its token holders will be treated as beneficiaries.
The regulations were issued on October 2 and made public on November 2. The initial registration fee for these regulations will be $1,470. The ADGM, which opened in 2015, follows English law within its jurisdiction. In 2018, it implemented regulations on cryptocurrency, and these new regulations are part of its ongoing strategy to establish itself as a prominent player in the blockchain and digital assets sphere. Ahmed Jasim Al Zaabi, the chairman of ADGM, expressed his vision for the future, stating that by transforming the blockchain and Web3 landscape, they aim to set global benchmarks with enhanced transparency and efficiency.
The ADGM has already taken steps to support the growth of Web3 technology. In February, ADGM resident Hub71 launched the Hub71+ Digital Assets, a $2 billion project aimed at encouraging Web3 growth. First Abu Dhabi Bank was also involved in this initiative. Additionally, Abu Dhabi and the ADGM are home to several other crypto service providers and foundations, highlighting the region’s commitment to fostering innovation in the blockchain and cryptocurrency industry.
Overall, the introduction of these comprehensive regulations by the ADGM Registration Authority is a significant milestone in establishing a regulatory framework for Web3 organizations. These regulations aim to provide clarity and guidance for blockchain foundations, Web3 entities, and decentralized autonomous organizations operating within the ADGM jurisdiction. With the continued support and investment in Web3 technology, Abu Dhabi strives to position itself as a global leader in the blockchain and digital assets space.
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