The Abu Dhabi Financial Services Regulatory Authority has introduced its guidelines on initial coin offerings as well as on cryptocurrencies in general. This move comes as the Middle Eastern financial capital is aiming to monitor transactions involving such currencies. But this move also comes with some warnings from the local government.
The FSRA states that it will regulate ICOs if they have characteristics similar to what securities feature. These include points like providing an investor with shares or some other form of ownership in a company.
The FSRA will also regulate ICOs that offer financial statements and disclosures. The group is hoping to get more ICOs to provide this information to make it easier for them to develop and be easy to market.
This marks a significant development in how the bitcoin and other currencies may be used in the Middle East. The work may potentially get various companies around the Middle East to start doing business with the bitcoin and handling it for many uses.
But even as ICOs will be regulated if they meet certain criteria, the same cannot be said with other currencies that have been fully developed. The FSRA did say that while the bitcoin and other similar currencies might be appealing investments, they are not being interpreted as legal tender. They are being treated as commodities just like precious metals and are therefore unregulated.
The FSRA is still open to many entities looking to issue ICOs. The FSRA states that it is aware of many groups looking to do business in the form of ICOs and that they are very interested in offering special details on their work. Much of this may come in the form of various white papers that list information on what can be found in certain ICOs.
A Prospectus Is Needed
Each company looking to start an ICO in the emirate must issue a prospectus. This typically comes in the form of a white paper and will list information on funding for the project, where the money is coming from, how it will be used and so forth. This is being treated in the same way as an initial public offering on the stock market would be.
Also, market intermediaries and other market operators that want to work with ICOs need to be approved of by the FSRA before they can start working.
An offer of securities must also be provided. Any ICO that does not offer such a feature that lists points on how data will be protected and secured will not be regulated.
A Major Change
The move from Abu Dhabi is different from what the nearby emirate of Dubai said. Dubai recently put out a warning on ICOs and will not regulate them.
Also, Abu Dhabi is being more proactive on ICOs than what many other bodies are doing. Although Japan does regulate the bitcoin, that country has not issued a decision on how the bitcoin would be utilized. Meanwhile, China has banned all ICOs from operating within that country.
Hi Mike, I join the bullish view for long term
Hi
It is spreading around! This is the future and there is no going around it. I’m sure there will be ups and downs on the way up, but in the long term i’m bullish of the idea of cryptocurrencies and all around it.