- Regulations mandate that DLT Foundations disclose the names of their key figures,
- DLT Foundations are barred from engaging in activities that require a license from the ADGM Financial Services Regulatory Authority
In a significant move, the Abu Dhabi Global Market (ADGM) Registration Authority has introduced purpose-built regulations for Web3 organizations, marking a significant development in the realm of blockchain and decentralized technologies.
The newly announced regulations, known as the Distributed Ledger Technology (DLT) Foundations Regulations, are tailored to govern the operations of blockchain foundations, Web3 entities, decentralized autonomous organizations (DAOs), and traditional foundations venturing into the world of distributed ledger technology.
These blockchain foundations offer critical financial and other forms of support for blockchain networks without direct involvement in their management.
Among the notable provisions within these regulations is the creation of a “DLT Foundation.” Organizations seeking to establish a DLT Foundation must submit a signed charter outlining the foundation’s initial assets, governance structure, and details regarding token issuance (if applicable).
Supporting documents, including a white paper, tokenomics paper, and a link to a technical document known as a DLT, must also be provided.
Crucially, DLT Foundations are barred from engaging in activities that require a license from the ADGM Financial Services Regulatory Authority. Token holders within these foundations will be recognized as beneficiaries of the organization’s activities.
The regulations, dated October 2, were officially disclosed to the public on November 2. The initial registration process will incur fees totaling $1,470.
These regulations also prioritize transparency, mandating that DLT Foundations disclose the names of their key figures, although this information will not be publicly accessible.
Furthermore, each foundation must adopt a name concluding with “DLT Foundation” and establish a council consisting of a minimum of two and a maximum of 16 members to oversee managerial and administrative functions.
Situated within the United Arab Emirates (UAE), the ADGM functions as an international finance hub and features a tailored licensing framework for virtual asset service providers, overseen by its financial regulator.
The UAE, particularly the emirates of Abu Dhabi and Dubai, has been actively working to create a conducive environment for blockchain and cryptocurrency companies.
Earlier this year, Dubai introduced a comprehensive crypto regulatory framework, and just last week, the UAE unveiled federal licensing requirements for virtual asset service providers looking to establish operations within the country. In February, Abu Dhabi initiated a $2 billion initiative aimed at supporting and nurturing Web3 projects.