Abu Dhabi Global Market financial regulator sets out guidelines on initial coin offerings
ADMG says initial coin offerings more cost effective way of raising funds
Abu Dhabi Global Market's financial regulator has set out guidance on initial coin offerings and virtual currencies to allow companies to take advantage of what it says is a more cost-effective way of raising funds.
"ICOs have transformed the capital formation landscape and global regulatory frameworks are evolving to adapt to such innovation," said Richard Teng, chief executive director of the ADGM said.
"Participants exploring the issuance of ICOs that offer real value to the market and wish to operate within our regulatory framework are encouraged to engage us early to gain insights into the applicable regimes."
The Financial Services Regulatory Authority said there is a need to provide guidance as virtual currencies are not strongly regulated and bringing transparency to the fast-growing area of finance is seminal to mitigating fraud.
Virtual currencies are treated as a commodity in the guidance laid out by the Financial Services Regulatory Authority. It also warned against investment by those seeking out-sized returns due to the volatile nature of virtual currencies like Bitcoin.
Abu Dhabi Global Market's financial regulator said that distributed ledger technology has a wide range of applications in financial services and markets as a whole and that it would regularly review and update its financial services rules and regulations.
Updated: October 9, 2017 12:49 PM