Abu Dhabi (ADGM) Publishes Draft Offers for NFT Trading

On Monday, the emirate’s free trade zone Abu Dhabi Global Market (ADGM) published a consultation paper titled “Proposals for Improving Capital Markets and Virtual Assets in ADGM”.

NFT Trading Recommendations

The publication includes suggested guidance for trading non-fungible tokens (NFTs) among other asset types. The report suggests that organizations licensed by a financial regulator from the free zone should be authorized to support NFT trading.

Along with sections on standard financial instruments, the document includes slightly more pages on virtual assets and non-traditional financial instruments. The Financial Services Regulatory Authority (FSRA), the free zone’s main regulator, refers to NFTs as intellectual property in this section, and not as “certain investments or financial instruments.” He also proposes that NFT marketplaces be managed through multilateral trading platforms (MTFs) and virtual asset custodians (VACs).

The document also states that NFT transactions may be required to comply with ADGM anti-money laundering (AML) rules and sanctions.

As stated in the document, the FSRA does not currently offer a formal regulatory framework for NFTs. The consultation paper is open for feedback until May 20 and invites stakeholders to provide input on several important questions such as “What types of NFTs should be allowed to trade on MTFs?” and “How should third-party NFT registries be integrated?”

Leave a Comment