The head of UAE’s top financial regulator has called for stronger international regulations to prevent financial crimes in the cryptocurrency trading industry.

Stringent regulation is necessary to prevent wrongdoings

Richard Teng, the chief executive of the Financial Services Regulatory Authority (FSRA) at the Abu Dhabi Global Market (ADGM) explained his stance by stating, “There are grave risks of financial wrongdoings if this space is not properly regulated. Every single time a crypto coin gets lost or stolen, the confidence of investors in this asset class is severely affected.”

Mr. Teng further elaborated on FSRA’s international collaborations, “Our management is positive that our broad regulatory regime will reduce these financial risks and bring enhanced confidence into this asset class. We have also shared our regulatory arrangements with several other international regulators like the UK Treasury, SEC [US Securities and Exchange Commission] and regulators of Japan, Hong Kong and Singapore.”

ADGM’s efforts to regulate ICOs

Last year, ADGM published a guideline on initial coin offerings (ICOs) and digital currencies following massive criticism and enormous volatility in the trading prices of several popular digital currencies like the Bitcoin. UAE’s ADGM became the first financial center in the GCC region to have published a specific guideline on virtual currencies. The document explains various aspects of cryptocurrencies and ICOs, like how funds can be generated through this increasingly popular crowdfunding tool in the crypto industry. It also declares that cryptocurrencies should be treated as “commodities” and crypto tokens offered for sale during ICOs should be treated as “special investments” under the ADGM’s regulatory scheme.

Currently, ADGM is also the member of R3 consortium which comprises of over 200 members and partners across multiple industries all joined together to apply distributed ledger technologies to the global financial services industry.

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