Abu Dhabi Markets Regulator Publishes ICO Guidance

The UAE's Abu Dhabi has released new guidelines for those looking to organize or participate in an initial coin offering (ICO).

AccessTimeIconOct 10, 2017 at 4:45 p.m. UTC
Updated Sep 13, 2021 at 7:01 a.m. UTC

The government of Abu Dhabi has released new guidelines for those looking to organize or participate in an initial coin offering (ICO).

Abu Dhabi Global Market's Financial Services Regulatory Authority (FSRA) said that it would apply existing anti-money laundering and know-your-customer (KYC) rules to token sales, classifying some as securities (depending on their makeup and underlying structure) and others as commodities. Like a growing number of regulators worldwide, the agency said that it would weigh the sale and release of blockchain-based tokens on a case-by-case basis.

The nine-page circular published yesterday includes instances in which a token sale would fall under or outside the definition of a security under Abu Dhabi law. Because the circumstances of such a determination may vary from project to project, the agency urged organizers within the region to "engage with us as early as possible in the fundraising process."

Richard Teng, the chief executive director of the FSRA, later said in a statement:

"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 regulatory regime."

Tokens which are not treated as securities will be treated as commodities, along with cryptocurrencies more generally. As a result, their trades will not be regulated by the FSRA, according to the circular. That specific determination notably brings the FSRA in line with the Commodity Futures Trading Commission, which revealed that it would regulate the US-based market in late 2015.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.