The Abu Dhabi Global Market (ADGM) Registration Authority has unveiled groundbreaking regulations that cover Web3 organizations. This regulatory framework is being touted as the world’s first of its kind, tailored to the specific needs of the digital age.
The Distributed Ledger Technology (DLT) Foundations Regulations outline the operational guidelines for blockchain foundations, Web3 entities, decentralized autonomous organizations (DAOs), and conventional foundations looking to venture into DLT. Blockchain foundations provide financial support and other resources to a blockchain network without directly participating in its operations.
Under these regulations, entities can establish a “DLT Foundation” by submitting a charter that includes details about the foundation’s initial assets, governance structure, and any token issuance plans. They must also provide their white paper, tokenomics paper, and a link to a technical document known as a DLT Framework.
Key figures within a foundation must be disclosed but will remain confidential. Each foundation must adopt a name ending with “DLT Foundation” and maintain a council of two to sixteen members for management and administrative purposes. However, these foundations will not be allowed to engage in activities that require licensing by the ADGM Financial Services Regulatory Authority. Token holders within these foundations will be treated as beneficiaries.
These regulations, dated October 2, were made public on November 2, with initial registration application fees totaling $1,470.
It’s important to note that English law governs transactions within the ADGM, a financial free zone established in 2015. The ADGM had previously introduced cryptocurrency regulations in 2018. The introduction of these new regulations reflects ADGM’s ongoing efforts to position itself as a leading player in the blockchain and digital asset space.
ADGM’s Chairman, Ahmed Jasim Al Zaabi, emphasized the transformation of the blockchain and Web3 landscape, aiming to set global standards for enhanced transparency and efficiency.
Earlier this year, ADGM resident Hub71 initiated the Hub71+ Digital Assets project, a $2 billion endeavor designed to promote Web3 growth, with participation from the First Abu Dhabi Bank. Abu Dhabi and the ADGM continue to attract a growing number of cryptocurrency service providers and foundations, solidifying their position as a hub for digital innovation.