The Abu Dhabi Global Market (ADGM) Registration Authority has introduced extensive regulations for 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 having direct involvement in it.
The regulations allow for the establishment of a “DLT Foundation” by submitting a signed charter containing a description of the foundation’s initial assets and details of its governance and token issuance (if any), together with the organization’s white paper, the tokenomics paper and a link to a technical paper called DLT Framework.
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A foundation will be required to disclose the names of its key figures, but these will not be made public. It must also have a name ending in ‘DLT Foundation’. A council of between two and sixteen members will be required for managerial and administrative purposes. A foundation is not permitted to carry out activities licensed by the ADGM Financial Services Regulatory Authority. The token holders will be treated as beneficiaries.
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The regulations date from October 2 and were made public on November 2. The initial registration fee totals $1,470.
English law applies within the ADGM, which opened in 2015. Cryptocurrency rules were introduced in 2018. The new regulations are part of ADGM’s ongoing strategy to raise its profile in the blockchain and digital assets space. ADGM Chairman Ahmed Jasim Al Zaabi said in an emailed statement:
“By transforming the blockchain and Web3 landscape, we are moving toward a future characterized by setting global benchmarks with improved transparency and efficiency.”
In February, ADGM resident Hub71 created a $2 billion project called Hub71+ Digital Assets to fuel Web3’s 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.
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